10 Common Business Loan Types & Their Advantages

1. Term Loan

·       Borrow a lump sum and repay over time.

·       Advantage: Predictable payments with fixed terms and interest.

  2. Line of Credit

·       Access funds as needed, similar to a credit card.

·       Advantage: Flexible use for short-term needs or cash flow gaps.

3. SBA Loan

·       Backed by the Small Business Administration.

·       Advantage: Low interest rates and longer repayment terms.

    4. Equipment Financing

·       Used to purchase business machinery or tools.

·       Advantage: Equipment acts as collateral, making approval easier.

5. Merchant Cash Advance

·       Receive upfront cash repaid via future sales.

·       Advantage: Fast approval and repayment based on your revenue.

6. Invoice Factoring

·       Sell unpaid invoices for immediate cash.

·       Advantage: Quick access to working capital without waiting for clients to pay

7. Microloan

·       Small loans typically under $50,000.

·       Advantage: Ideal for startups or small businesses with limited credit.

   8. Commercial Real Estate Loan

·       Finance the purchase or renovation of property.

·       Advantage: Build long-term equity in your business location.

9. Bridge Loan

·       Short-term funding while waiting for long-term financing.

·       Advantage: Provides immediate capital during transition periods.

10. Working Capital Loan

·       Covers daily operating expenses.

·       Advantage: Keeps your business running smoothly during slow seasons.