This type of loan is a lump sum of the amount you want to borrow. You will then repay the loan within a fixed time period. The terms vary depending on the amount and your agreement with the lender. Usually, the repayment term is between 1 to 10 years if it is a short-term loan. However, if it is a long-term loan, it can be 25 years or even longer.
Why is this a smart option? By getting a term loan, you get to have a cost-effective way to finance your business. If you need money for a major expense, for instance, you want to make renovations or buy equipment, this is a good option.
For those seeking long-term funding, there are several business grants available for women. There are federal business grants available. Although they are limited to a certain number of industries, women entrepreneurs get to have good repayment terms. The only downside is that applying for a business grant involves a lot of paperwork. Business owners are also required to give regular updates like the financial status and performance of the business. The government requires such report to ensure that the funds are used for its right purpose. In addition to federal business grants, there are also state and local grants. These are very limited and may vary from one state to another.
One of the best types of loans for women is the SBA loan. This is guaranteed by the United States Small Business Administration. An SBA loan can go as high as $5.5 million giving you a low-interest rate around 10% or less and it is payable between 7 to 25 years depending on the amount you want to borrow. Lenders who offer SBA loans follow the SBA guidelines so you don’t have to worry about onerous terms.
Women business owners who consider getting an SBA loan has to know exactly the amount of funding that they need. This is the very first step considering that having an SBA loan can be a tedious process. The requirements can be quite strict and you need to be prepared with the list of documents and other information required from you.
Before you submit your application, you need to know if you are eligible and if you meet the borrower requirements. These include the following:
Online loans are becoming more and more popular not just for women business owners. Not only are they easy and convenient to get, the processing time is also fast. If you are having a hard time qualifying for a traditional loan, this may be your option. You do not have to submit a lot of paperwork.
How about if you have bad credit? The good news is that online lenders can still give you the funds that you need even if you have a poor credit score. The only thing is that although they may not completely reject your loan application, you should expect higher rates. There is a high risk involved for lenders to offer loan to those who don’t have good credit records.
Applying for an online loan is easy. There are several online lenders that offer business loans for women. The requirements may vary depending on the loan company. But you don’t have to worry about the strict requirements and tedious process.
If you want flexibility when it comes to using the funds, business lines of credit could be the best choice. You are only given access to a certain amount. It depends whether you want to use the whole amount or not. Why is this a smart option? You only pay for the interest on the specific amount you use. Another advance of the business line of credit is that it can increase which means that it can be higher than the original amount.
For entrepreneurs with good credit score, access to credit is not difficult. There will always be loan options available. But even if you don’t have a stellar credit score, it does not mean that you can no longer have the funds that you need. Here are some important things that you need to consider before signing up for a loan.
Joshua is a financial lawyer who plans on writing a book about his experience on debt collection laws and lending terms and conditions. He is currently one of the senior partners at his law firm but wants to take more time off for his writing.