There are many options when it comes to small business loans. There are startup loans, equipment loans, business credit cards, business line of credit options, and loans to help recover from disasters. The problem is not only determining which type of loan would work best in a particular financial situation, but also whether a traditional or SBA loan would be a better fit. What are the pros and cons of each, and how does one really determine which option is right one?
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SBA Loan Pros
SBA Loan Cons
Non-SBA Loans Pros
Non-SBA Loans Cons
If you have stellar credit and plenty of money or collateral, this type of loan is easy to get and offers low interest rates. If, however, your credit is not so stellar or you are lacking in funds in the first place, these loans can be difficult to land. There is plenty of red tape, and lenders are looking to mitigate risk as much as possible. This means if you show signs of being a risk, such as poor credit, a poorly written business plan, lack of experience, or any number of other factors, you could be denied repeatedly.
Each financing option has good qualities and bothersome ones. The key is to research each one diligently, recognizing that if the other loans do not pan out, the SBA loan programs may be your only choice anyway.
How have you decided between SBA and non-SBA loans for your business?
This article was originally published by Biz2Credit
This article was submitted by Faith Stewart. Faith Stewart has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.