Taking out a loan by a company does not have to be a symptom of financial problems (although in many cases loans are able to solve these problems). A loan may be needed even to finance an expensive but potentially profitable investment. In addition, additional funds are needed, especially at the very beginning of the company’s activity. We do not have any income yet or it is small, and to increase it you need employees, equipment, vehicles or an office. But where do you get the money for it if you don’t have any savings and can’t get a family loan?
A solution can be even a loan for young entrepreneurs. So what are the types of business loans? In what situations will the loan be the most profitable?
What are the types of business loans?
Before we get to know all the major types of business loans in detail, it’s worth collecting them all in one place. This is particularly important considering that there are many more types of business loans than most people would expect. Therefore, when we say that we are interested in business loans, we really speak very little – we can mean many very different types of loans.
The most common types of loans for companies are:
- revolving loan
- investment loan
- bridging loan
- technology loan
- consolidation loan
- loan for start-up companies (loan for young entrepreneurs).
The purpose of some of these loans is more general (for example, overdraft) and others – specific (consolidation or investment loan). They may also differ between the conditions of receipt or cost-effectiveness
Non-bank loans to companies – is it worth it?
Based on the above information, it can easily be concluded that loans to entrepreneurs require a good financial condition of the company. Having debts or not too high income does not necessarily mean that our company will not receive a loan. However, this reduces the chances of a positive decision. However, bank loans are not the only solution. Loan companies also have in their offer loans for company owners, which are often very attractive. A big advantage is the fact that lenders generally do not require company account statements, certificates of default or other formalities. A loan for a company via the Internet can be taken very quickly and conveniently via the Internet. In most cases, only our personal data and company tax identification number will be needed.
The cost of loans at loan companies is generally (although not always) higher than at banks, but this is because lending to a low-income enterprise or a person with a negative credit history is very risky. There is a much greater chance that such clients will not pay their debts on time, which means that loans must be more expensive. Despite this, you can still come across many interesting and profitable loan offers. There are a lot of loan companies and they compete with each other for clients, so you can often borrow money from them even at a very low cost. There are cases when the first loan in a given company is completely free (its APRC is 0%). However, we must be particularly careful to pay back such free loans on time.
If we do not do this, we will face severe punishment. Non-bank loans are an interesting solution when we cannot count on a bank loan or we care about time. However, we should be careful when taking them and carefully analyze the details of each offer before we decide on one.
Types of corporate loans – summary
As you can see, the types of corporate loans are extremely diverse. Thanks to this, every entrepreneur should be able to find a loan that meets their needs and requirements. When searching for the perfect loan, it is worth comparing the offers of many different banks, so that you can definitely choose the best one. We can use online comparison websites and rankings, but remember that they are not always completely reliable.
By going to a qualified credit counselor, we are sure that you will get reliable and beneficial advice. Very popular types of corporate loans include working capital, investment or overdraft. Entrepreneurs rarely use consolidation loans or technology loans, but they are also worth looking at. In certain situations they can be very profitable. There is also an alternative in the form of a cash loan for individuals.