advantages of business loans
Diane Challis

Diane Challis

Advantages Of Small Business Loans

Whether your business is a start-up or well established, the advantages of small business loans are endless. Find out how you could benefit here...

Many people mistakenly think small business loans are only beneficial when you are getting the business up and running in that initial stage. While a loan can make a huge difference to getting you on your feet there are so many more advantages of small business loans, which can be taken up at any point of your business journey. It is about recognising where your business is, where you want it to be, and how you can get it there. If you are wondering if a small business loan is right for you, then let us walk you through the advantages of small business loans and just how they can make a huge difference.

What Is A Small Business Loan?

When it comes to starting your own small business, finding the right financing for your needs can be difficult. You will often find that many creditors aren’t willing to take a chance on an unknown, and if they are, it comes at the price of hefty interest rates that can be crippling to your small business finances.

At it’s very simplest, a small business loan is an agreement made between a small business and a lender for a certain amount of money. This loan can be given at start-up stage, or further down the track once the business is established. No matter which stage of the journey the loan is acquired, there are so many advantages that come with small business loans. The terms in the loan are agreed upon by you and the lender.

business loans advantages

Types Of Small Business Loans

The great thing about small business loans is that you aren’t limited in your choices when it comes to taking one out. The most important thing is to make sure you shop around and know exactly what you are looking for before you take out your small business loan. Here are some of the options you can consider:

  • Unsecured business loans: this is a loan that comes with no security, which means it tends to have higher interest rates.
  • Credit Card: getting a business credit card is one of the simplest ways to borrow money for any small business.
  • Short term business loans: These are usually repaid within 12 months of taking them out.
  • Bad credit business loans: if your business has been through hard times that has a left a mark on your credit report, you still have the option to take out a small business loan.
  • Invoice discounting: this is where you can receive up to 90% of your invoices paid to you upfront, without having to chase up bills.
small business loans

Advantages Of Small Business Loans

Now we understand what a small business loan is, let’s take a look at the advantages of small business loans.

  1. Get your business up and running: many small businesses need a helping hand when it comes to start-up costs and a small business loan is a perfect boost.
  2. Get a project up and running: you may have a great project in the works, with no way to finance it. A small business loan gives you access to the funds you need to finance these, enabling your small business to grow.
  3. Avoid taking on investors. By choosing to take out a small business loan, you remain in complete control of your business. An alternative is to sell to investors, which means they own a portion of your business and can have a say in how it is run. Small business loans avoid this.
  4. Immediate access to funds: you may have a great business model in place, but it can still take time for the funds to come through from sales. A small business loan can act as a payday loan and tide you over until your next payment to keep the business operating.
  5. Increase your cash flow: whether your small business has hit hard times, or you have unexpected expenses that weren’t accounted for, a loan can help get you through.
  6. If the business fails, you don’t have to pay back the loan. This takes away a lot of the risk involved. Instead, your business is liquidated and all assets are sold to repay this money.
  7. Your business credit will also improve. Assuming you make the repayments on time and don’t default on them, your business’ credit score will improve by taking out a loan, giving you more options for the future.

Taking Out A Small Business Loan

Are you looking to take out a small business loan, but not sure where to start? The team at ALC Commercial can look into your small business and give you advice on the best type of loan for your circumstances. Remember, there are so many advantages that come with taking out a small business loan, it is worth looking into what it can do for your business. Give the experts a call today.

For more information on business loans, commercial finance, debt consolidation, bad credit business loans and low-doc business loans talk to our experienced and understanding loan specialists to see how our business loans can support your business goals.

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