financing4prosperity

Types of Private Business Loans

Now that we’ve gone over who you can work with for a private business loan, let’s take a look at what you’ll be able to work with.financing4prosperity

As we said, private business loans come in many shapes and sizes, so you should become familiar with all of your available options to make sure you’re choosing the best possible option for you and your business.financing4prosperity

Here are the main types of private business loans available on the market.

SBA Loans

When it comes to private business loans, SBA loans are a bit of a gray area.

Though they are often funded by a private lender, SBA loans are always partially guaranteed by a government entity, the U.S.financing4prosperity Small Business Administration (SBA).

Because of this partial guarantee, SBA loans come with long terms, low APRs, and high loan amounts. As such, they’re the cream of the crop as far as your private business loan options.

Keep in mind that, because they have such ideal terms, SBA loans will always be some of the most difficult to qualify for.financing4prosperity. Most business owners that qualify for SBA loans have good personal credit, high annual revenue, and a long business history under their belt.financing4prosperity

Medium-Term Loans

Next up: medium-term loans. These private business loans are often referred to as term loans and they’re another affordable private business loan option for small business owners.

They mirror traditional term loans that banks offer to businesses, but they’re often far easier to qualify for with a private lender.

These loans are likely what you picture when you picture a business loan—a lump sum paid back over time, plus interest, with monthly payments.

After SBA loans, term loans are the most affordable but hardest to qualify for out of your private business loan options.

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