SBA 7(a) Loans
While the loan is partially guaranteed by the Small Business Administration, the financing is delivered through an approved SBA lender. This way, you can borrow anywhere between $20,000 and $5 million for as long as a 10-year term. The SBA’s 7(a) loan program is attractive to many small business owners for its below-market interest rate. If you apply through Funding Circle’s network of lending partners, you’ll see that the interest rate is currently set at Prime + 2.75% (currently 6%). 1 Payments are made monthly and you won’t face any fees for early repayment. Your business should have an operating history of at least three years to qualify. Use the proceeds for working capital, refinancing debt, making major purchases, and more. Learn more about applying for an SBA 7(a) loan through Funding Circle.
Term loans are one of the most popular types of small business loans. If you’ve ever taken out a mortgage or financed a vehicle purchase, then you’re probably familiar with the mechanics of a term loan. Term loans are delivered via a lump-sum of capital from a lender and paid off in fixed installments according to a schedule until you pay back the principal plus any applicable interest (and any fees). Repayment periods can vary from short term (12 months or less) to medium term (1 -3 years) to long term (3+ years). Term loans are typically secured by a lien on your business assets (a right for the lender to seize those assets if you default on the loan) and may require a personal guarantee, which means your personal assets may be liable if your business defaults on the loan. One of the perks of a term loan is that the interest rate, which could be either fixed or variable, tends to be competitive and lower than other types of small business financing. This is especially true when you consider that you may be repaying the loan over a number of years. Business owners have flexibility with regards to how they can use the funds. For instance, one could use a small business term loan to expand to a new location, replenish inventory, or hire new employees.
Merchant Cash Advance
Merchant cash advances (MCAs) aren’t exactly small business loans. Instead, they’re a cash advance against your future credit card revenue delivered to you in a lump-sum. The advanced amount, which can be anywhere from $2,500 to $400,000 is determined https://worldpaydayloans.com/payday-loans-ak/fairbanks/ by the issuer and based on your average monthly credit card sales. For example, through Funding Circle’s network of lending partners, this amount is between $5,000 and $500,000. Because the cash advance is repaid as a percentage of your daily credit card revenue, it may take anywhere from 90 days to two-and-a-half years to repay. One of the key risks of MCAs is piling on too many of them – known as stacking – which may completely deplete your cash flow. You should also be aware that interest rates (often expressed as a factor rate) can be very high, ranging between 40-350%. Learn more about applying for a merchant cash advance through Funding Circle.
Working Capital Loans
A working capital loan is a short-term loan meant to help a business cover its everyday operations needs. It can be directed toward expenses such making payroll, paying rent, or making debt payments. A working capital loan is not meant to buy long-term assets or investments. You can apply for a working capital loan through Funding Circle and receive a decision in as little as 24 hours. 2 The speed of approval is one of the best aspects of this small business loan. Learn more about applying through Funding Circle.