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Understanding business loan options

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If you want to get a business loan, it is absolutely crucial that you have a firm understanding of the various available loan products, which will best serve your business, and which banks are the best to approach about lending for that loan type.

Many rookie businessmen looking to get a bank financing for their business think that approaching any bank is fine. They make the mistake of not recognizing that there are a myriad of business loan types, and each have different qualification requirements, rates, etc. Banks are not in the business to educate those seeking financing about every loan product available. Your best chance for getting the financing you desire is to know your business loan options before approaching a bank.

One of the reasons it is important to familiarize yourself with the type of business loans being offered is that loan approval rates are dropping around the country. Knowing the loan types will give you the best chance for choosing one that you can get approval with. It will also help you find one that best suits your personal needs and plans.

There are well over fifteen types of small business loans available. Each offer their own unique requirements, rates, and terms. There are professional loans specifically for doctors and lawyers. There are AR loans for those that need an influx of cash, but have a lot of business, possibly with unpaid accounts. There are start up loans, expansion loans, angel investors, and more. If you are looking to acquire an existing business, you would seek a different loan than someone looking to buy into a franchise. Understanding these fundamental differences, and what the different loan products can mean for your business will help you to make the best financial decision for your company.

Here is a list of fifteen of the most common types of business loans:
1. SBA loans
2. Equipment cash out refinance
3. Accounts receivable factoring loans
4. Merchant cash advance
5. Start-up loans
6. Franchise start up loans
7. Business acquisitions
8. Line of credit
9. Professional loans
10. Equipment financing
11. Construction financing
12. Hard money equity loan
13. Working capital loans
14. A/R or P.O. Financing
15. Peer to peer loans

These loans are not listed in any particular order, but taking the time to understand what each loan constitutes, the type of loan it is (Secured or unsecured), long or short term, and the types of rates that are typical of that loan will help you to get the loan that is best for your company. Remember the world of business financing is a competitive one. The more you know, the more you prepare, the better chance you have of getting the funding and financing you need to grow, succeed, start, or whatever it is that you need the money for. Take the time to understand your business loan options, it is well worth the effort.

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Posted by DK
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