When you’re at the helm of a small business, every penny counts. In fact, 49% of business leaders stay awake at night due to financial worries.
You need to fund working capital, secure major assets, and get your operations up and running. The only problem? You’re strapped for cash.
This is where debt financing can make a world of difference. Today, we’re sharing a few quick facts about business loans and how they can help get your enterprise off the ground.
Ready to learn more? Let’s get started!
Debt Financing Can Be Short-Term or Long-Term
Depending on the type of loan you need, debt financing can be short-term, intermediate-term, or long-term.
Short-term financing provides small businesses with a quick source of working capital. Most business owners pay back short-term loans within six to 18 months and intermediate loans within three years.
Conversely, long-term financing helps them acquire and maintain fixed assets, including property and equipment. These loans allow business owners to leverage their company’s cash flow to pay back the loan in no more than five years.
Specific Loan Types Will Vary
There are many different sources of debt financing, and there isn’t a one-size-fits-all solution. The types of loans you can obtain include:
- Loans provided by friends and family members
- Personal loans
- Bank loans
- Term loans
- Lines of credit
- Government-backed loans (e.g. SBA loans)
- Real estate loans
- Credit cards
- Term loans
For most small businesses, the most common source of debt financing is family and friends, rather than a commercial lending institution. If you go this route, make sure to draw up official legal papers to dictate the loan terms and avoid conflict down the road.
Loans Can Be Secured or Unsecured
Debt financing can include both secured and unsecured loans.
With a secured loan, you’ll put up a form of collateral that guarantees you’ll pay the amount you owe. If you default on the loan, you forfeit the collateral to satisfy payment. Types of security can range from real estate and insurance policies to warehouse inventory and accounts receivable.
In some cases, you may partner with a lender that allows you to pursue an unsecured loan based on your excellent credit reputation. These are rarer than secured loans and are normally short-term loans with high-interest rates.
Online Funding Makes It Simple
Rather than spending hours at the bank, why not hop online and find out in minutes if your small business qualifies for a loan up to $500,000? Platforms like ours help you expedite and simplify the loan process.
After you enter a few key details about your funding requirements, you’ll see your estimated payment terms in seconds. From term loans to eBay and Amazon seller loans, we cover a wide range of financing needs!
Find the Debt Financing Solution You Need
Sometimes, you have to spend a little money before you can make a lot of money. At Dealstruck, we get it.
We’re dedicated to providing trustworthy small business debt financing that can help your business grow and achieve its goals.
Apply now to see if you qualify, and you could receive your funds in as little as 48 hours!