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Loan Types SBA Loans Equipment Financing Invoice Financing Business Term Loan Long Term Business Loan Business Lines of Credit Loans
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Compare Best Business Loans in  May, 2021

How to find the best business loan lender in 2021?

83% of our readers found their best business loans here. Let's help you compare top business loans lenders in May

Top10best.io®, Editorial Team

Looking for a business loan to start a new business, or perhaps you are a business owner and thinking of borrowing money to grow your business? – AND You don’t want to pay high interest rates that’ll break you? Read on…

We have reviewed and compared over 70 legitimate business loan lender from each country. In this review we share our best business loan reviews for the following countries:

You can compare loan providers and review the pros and cons of their loan terms, and choose the best loan lending company or bank that meets your requirements.

Please be cautious. There are risks involved in borrowing money.

What is Business Loan?

What is business loans – Explained in simple terms:

There are several types of loans. When it come to borrowing money for your registered business, it is called business loan. 

You can borrow money for business purpose if your company need cash for:

  • Start up your business
  • Buying equipments
  • Cash flow boost
  • Unpredictable Financial Difficulties such as Covid-19
  • Growing your market share

Typically, business loans come with different interest rates. It can be either a fixed or variable. Your financial lender might offer you a secured loan or unsecured loan

How do Business Loans Work?

What type of business loan is suitable for your business?

The best way to explain how business loan works and whether this business loan is good for you is to categorise the business loans into different types. In fact the correct question is this, What type of business loan is good for my business.

5 Major Types of Business Loans

What are different types of business loans?

There are five major business loans that you can apply for. They are sometimes called as the Best Alternatives to business loans. Here is the quick list:

  1. Business Term Loans
  2. Invoice Financing Loans
  3. Equipment Financing Loans
  4. SBA Loans
  5. Business Lines of Credit
1

Business Term Loan

What is a business Term Loan? Traditional Loans for small businesses

If you go for a traditional business term loan, you should know that even though it is one of the best business loan types in the market, it’s actually harder to qualify for because you need to have significate credit score.

In brief, here is what you need to have when applying for traditional term loans.

  • you should have been running your business for over two years
  • You need to show a positive 650 credit score.
  • Your annual revenue must be at least $300K

How to Apply for Business Term Loan

What do you need to compare and get business Term Loans?

Business term loans are not good for starting up a business but can be helpful when you are planning for growth.

You should think about applying for Term loans if you have a “longer term” financing strategy” and planning to use the loan for equipment, land and or buildings or even scaling another business.

The rule of thumb is to be able to be able to repay the loan on time, so you should have a strong cash flow to match with funding of assets .

If you buy an equipment or an asset, you should ensure that it will work efficiently for a longer period than the term of your loan. Therefore, committing to a five years loan is not wise to upgrade your company printers or buy new laptops with maximum two to three years life,

Now, if you meet the minimum requirements, you should prepare the following documents and apply for the loan:

  • Valid Driver’s License
  • Voided Business Check
  • Company registrations that can be used as proof of Ownership
  • Your latest Bank Statements that should not be older than 6 months
  • Company Balance Sheet
  • You need to show your PnL (Profit and Loss)
  • Proof of positive credit score
  • Tax ID 
2

Invoice Financing Loan

What is Invoice Financing Loan?

Invoice financing is a self-secured type of loan. When taken out, it helps small business owners who are waiting for some  outstanding invoices to accrue.

Since the loan is self secured by the invoice, you can present your invoice as an evidence When you apply for Invoice financing loan, and have a chance to receive up to 90% of your invoice’s fees.

How to Apply for Invoice Financing Loan

How to compare and get invoicing financing loan for my business?

The good thing about Invoice financing loan is that it is much easier to apply for because it does not need credit minimum requirements.

Here is what you need to apply for invoice financing loan:

  1. Proof to show that you’ve been running the business for the past 6 months.
  2. Your annual revenue should stack up to $50,000
  3. Driver’s License
  4. Latest Bank Statements
  5. Credit Score (It can be optional)
  6. The actual outstanding invoices that you want to claim

You will most likely to be charged:

  1. About 3% origination fee. It’s sometimes called the advance fees
  2. An additional 1% factor fee. This will be added to your debt every week the invoice is not cleared.
3

Equipment Financing Loan

How to compare and apply equipment financing loans?

Commercial equipment finance loan is also a self-secured loan and you can apply for it when you borrow money to pay for a new piece of equipment.

The terms of your  equipment financing loan equals or less than the the projected life of the piece of equipment. The advantage of borrowing money for purchasing equipments is that you might be able to secure your loan for a value up to 100% of the equipment’s price.

How to Apply for Equipment Financing Loan

How to compare and apply equipment financing loans?

The requirements may vary from lender to lender, however, generally what you need to to do to successfully apply for equipment financing is listed below. 

  • You should have been running the business for at least a year
  • You must show that you have positive 600+ credit score
  • Your business turn around revenue must be at least $100,000+
  • Present a Valid Government issued ID like your driver’s license
  • Latest Bank Statements
  • Equipment Quote
4

SBA Loans: Small Business Administration

How to compare and apply for SBA Loans?

The next type of business loan on our list is one of the most complicated to understand but one of the most affordable to pay off.

Let’s simplify this loan too. SBA loans, in other terms Small business administration loans, are categorised as long term loan that are backed by government sector: “Small Business Administration”.

The guarantee comes in a form commitment from the government to lender, so ni circumstances that the borrower can not pay the debt, the SBA unit will clear the payment.

Since it’s guaranteed by a powerful part of the government, the lenders feel more secured and are willing to offer much higher amount at a lower APRs.

How to Apply for SBA Loan

How to successfully get SBA loans?

As a guaranteed business loan, the duration and terms of this business loan can go up to 25 years and the amount, which of course varies from business to business, ranges from anything over $5,000 up to maximum $5 million. The interest rate is fairly low and can start from 6%.

Here is what you need to know before applying for SBA Loans:

  • Provide proof that you’re operating the business for at least two years
  • A Valid Photo ID
  • 620+ credit score
  • Present a record that shows your annual revenue return is over $100,000
  • Lates Valid Bank Statements
  • Company Balance Sheet
  • A Clear PnL Statement
  • Tax ID &Tax Returns
  • Your documented Business Plan
  • Business Debt Schedule
5

Business Lines of Credit

How to compare and get Business Lines of Credit Loans?

The concept of business line of credit is very similar to owning a business credit card.

If you meet the requirements and qualify for line of credit for your business, you’ be able to use a credit line limit on a monthly basis.

In terms of installment and repayment terms, you should only pay back what you have spent and used from your credit line, and nothing more. The other Pros of have a line of credit is working with cash. That means you don’t need to pay extra interest to receive the cash advance.

The credit limits always vary from one lender to another, and it relies on several factors including your business sustainability and cash flow strengths.

How to Apply for Business Lines of Credit

How to successfully get Business Lines of Credit Loan?

Normally, if qualified, you should be able to open your line of credit. Here are the advantages of having a line of credit:

  • The credit limit ranges from a couple of thousands of dollars up to $1 million.
  • The repayment terms can be set from monthly, and the terms can very from half a year to half a decade.
  • The interest rates may vary from 7% up to maximum 25%.

TO apply for line of credit you must present the following:

  •  No minimum personal credit score requirement is needed.
  • Proff of operating the business for half a year
  • An annual income of  $50,000
  • Passport, or a Valid driving license
  • Solid Bank Statements
  • Company Balance Sheet

Compare Best business loans in Australia

What are the best business loan providers in Australia?

Looking for the best business loans in Australia to compare?

In this list you can easily compare Australia business loans for small to medium businesses and choose the one that meets your requirements.

Compare UK Business loans

What are the best business loan lenders in UK?

What are the best business loans lenders in the UK right now?

In this list you can find the best UK business loans for small to medium businesses.

Compare Best Business loans in Canada

What are the best business loan companies in Canada?

Looking to compare best business loans in Canada & USA right now?

This is the quick list of top 5 best loan lenders this month:

Compare Best Business loans in India

What are the best business loan lenders in India?

Struggling with your business and trying to compare the most affordable business loans lenders in India?

Here is a quick option for Indian business owners to apply for business loans.

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