Estimated reading time: 2 mins
There are a variety of different small business lenders sources which are specific and valuable to certain business types. Knowing your business and its needs will put you on the right path for determining which lender is perfect for your business. From banks, credit unions and other business owners, to alternative business lenders in cases which business owners can’t get a traditional loan due to credit restrictions or other strict requirements in traditional lenders. Knowing which lender is best suited to meet your loan needs such as budget and terms, will provide you with the loan that will provide your business with the growth it needs.
Bank Lenders
If you’re a business owner that is well established and has great or good credit, a bank lender is probably best suited for you. Banks such as Wells Fargo and Bank of America provide long-term financing options, as well as reasonable interest rates. Bank of America provides fixed interest rates as low as 4.00%.
Credit Unions
Credit unions are co-operative by business owners working in or are a part of the same association. These common attributes between members include:
- Living or working in the same area
- Working for a common employer
- Belonging to the same church, trade union or other association
Each credit union has its own specific common bond between its members, and to be included in a credit union, you must have some sort of common bond with the other members. If you decide and are eligible to be a member in a credit union, you are then able to access loans from other members. Most credit union loans last 5-10 years but there are some that can last longer. Among other things, a credit union loan usually charges low rates of interest.
Other Business OwnersÂ
If you have connections with other business owners, this might be a great option for a lending source. Ensure that a legal statement is included within this type of lending term. Just like with bank and traditional loans, this can include collateral or interest rates so that the lender can trust that their money will not be lost. The only negative aspect of this source of lending is that if things go sour, or if you fail to make your payments, the personal relationship could potentially be affected. Keep all of these things in mind before deciding on obtaining a loan from another business owner.
Alternative Business Loan Lenders
For those business owners that have a relatively low credit score or have trouble acquiring a bank loan, an alternative lender is certainly something to consider. These alternative lenders such as Smartbiz, provide a number of great pros including:
- Convenience
- Speed
- Low interest rates
- Longer payment terms
If you’re a business owner that needs cash fast, this may be the best choice in considering lenders. Alternative lending isn’t for everyone though, as businesses who are just getting started probably will not qualify. For smaller businesses, there are other lending sources such as business connections, micro-loans, and SBA-approved lenders (The U.S Small Business Administration).
