As a gigster, you probably run into a lot of situations where you need money that you don’t have on hand. You want to start a new business but need an expensive car or equipment. Or maybe you want to expand a running business but don’t have the necessary capital.
If you want to launch a new business idea, invest in property for a running business or need funds for another reason, a small business loan can help you achieve your professional goals.
This article discusses some common types of small business loans and the lender’s best options for finding finance today.
- With the wide variety of small business loans, you are sure to find one that suits your needs.
- Kabbage offers the most flexible loan options for small businesses.
- Fundera offers low-risk SBA loans to help businesses build credit.
- BlueVine makes small business loans to those with low credit scores.
- FundingCircle offers the best term loans for small businesses.
- Kiva offers the best microloans to non-bank borrowers.
- OnDeck offers term loans with the potential for same-day disbursement.
Types of Small Business Loans
There are many financing options for small business loans. Which is best for you depends on your credit, collateral and circumstances. Check out the loan types below to learn about some of the more common types.
When they hear the word “loan,” most people think of a term loan. The lender gives the borrower a lump sum, which the borrower repays in fixed monthly installments with interest. Most auto loans, home loans, and personal loans fall into the term loan category.
Unlike some types of loans that limit the destination of money, term loans offer flexible financing for whatever you may need. You can use a term loan to finance large equipment purchases, pay new employees, or cover daily expenses.
Entrepreneurs buy commercial real estate using commercial mortgages. These loans work in a similar way to other term loans with the loan of a lump sum and repayment via fixed monthly installments. You could use a commercial mortgage to buy commercial property, renovate an existing property, or even refinance another commercial real estate loan.
Backed by the government, Small Business Administration (SBA) loans provide capital at lower interest rates and less risk to the borrower. These loans prove to be very useful, but the application process is often lengthy. It may take months to approve an SBA loan, so reconsider this option if you need the cash fast.
Corporate credit lines
Many business owners opt for lines of credit over traditional loans to borrow only what they need. Credit lines provide revolving credit limits and charge interest only on what you withdraw. If you need varying amounts of money over a long period, a business line of credit can help you keep your cash flow.
Entrepreneurs who need a small amount of money take microloans of up to $ 50,000. Some microloan lenders charge ridiculously high interest rates, but you can find an affordable microloan from the right lender.
The type of small business loan you need depends on your business and circumstances. For example, an SBA loan can provide the perfect financing option if you need a low-risk loan with modest interest rates and fees.
Small business loans for gigsters
Below, you will find a list of the best small business loans offered by private lenders. These options include term loans, lines of credit, SBA loans, microloans, and loans with low credit score requirements.
Kabbage: More Flexible Loans
If you need capital but aren’t sure how much exactly, Kabbage offers a great solution. Kabbage customers get approval for a specified amount of financing, provided through a line of credit.
Since you don’t have to withdraw the entire loan amount at once, you only pay interest on what you have spent. Kabbage offers maximum flexibility by allowing business owners to borrow what they need when they need it rather than taking out an over-term loan.
Fundera: the best SBA loans
If getting into debt makes you nervous, try an SBA loan to benefit from government support, lower interest rates, and lower fees. Fundera offers SBA loans to help small business owners with limited credit histories and lower credit scores.
BlueVine: the best bad credit loans
Another small business loan option if your credit score needs to rise is BlueVine. This private lender offers financing to small business clients with FICO scores as low as 530. If you need capital but don’t qualify for many loans, BlueVine could provide the financing you need.
FundingCircle: Best Term Loans
FundingCircle offers small business loans of up to $ 250,000. They only require a minimum credit score of 600 and can offer same-day disbursement depending on where you live and the amount of your loan. However, entrepreneurs in Nevada, North Dakota, and South Dakota are not eligible for loans from FundingCircle.
FundingCircle doesn’t charge prepayment fees, so you won’t be penalized for making prepayments on your loan.
Kiva: the best microloans
If you are an entrepreneur without a bank, you probably have a hard time qualifying for corporate loans. Kiva offers microloans between $ 1,000 and $ 15,000 with no interest to help such entrepreneurs get the finance they need. Kiva does not require a minimum credit score, but does require investors in the form of friends and family.
OnDeck: the best same-day loans
If you need same-day funding, consider OnDeck. This private lender offers loans to entrepreneurs with the potential for same-day disbursement (up to $ 100,000 in some states). OnDeck only requires a minimum credit score of 600 and offers loans of up to $ 250,000.
Find a small business loan through these top lenders to kickstart your efforts to achieve your goals, whether you are starting a new business venture or need capital for a current small business. If you’re looking for more tips for running a small business, click this link to discover a few essential tips for corporate finance from Nearside’s small business banking experts.