There is a large group of lenders who have devised lending schemes that fit the requirements of business owners. Business loans are of two types- Large business loans and small business loans.
Large Business Loans
Large business loans are designed for buying land, building, machinery etc. Generally, such loans are secured loans. A businessman has to produce collateral as these loans consist of big amount. Rate of interest is low and repayment period is longer in secured loans, which ease off borrowers' burden.Small Business Loans
Small business loans are used for buying raw materials, working capital and to maintain the cash flow in your business. It is normally a low amount loan and can be obtained easily. Small business loans are generally unsecured loans. For such unsecured loans, repayment period is generally between three to seven years. Rate of interest is a little higher than that of secured loan. For small entrepreneurs it is difficult to raise capital as most lenders consider them as borrowers with unstable and poor creditworthiness.Obviously most small businessmen do not have a steady income and their businesses often run on loss or low profit. Lenders always have a tendency to cover themselves because no business organisation guarantees stability. You need a lot of professional acumen and enormous wariness to survive in the business environment. Read also: Loans for Professional Services, Manufacturing & other industries
If you maintain good credit ratings, you will find lenders rubbing their shoulders to provide you a business loans. So, unleash the businessman in you and give shape to your dreams that you have envisaged regarding your business.