At some point, nearly every small business will require some extra capital—whether to boost existing cash flow, to bring on new employees, or simply to grow the business to the next level. Luckily, there are several business financing options to choose from, each as unique as the business they’re funding.
Below, we’ll dive into the details explaining the different types of business loans (as well as the best lenders for each type).
The Different Types of Business Loans, Summarized
LOAN TYPE TYPICAL AMOUNTS, TERMS, AND RATES BEST FOR
Up to $600,000; about 1 – 5 years; 7% – 30%
Variety of business owners across different purposes; faster processes and fewer requirements than traditional bank loans
Business lines of credit
Up to $250,000; up to 2 years; 7% – 25%
Business owners who want a flexible form of financing to cover more immediate funding needs
Up to $5 million; 5 – 25 years; variable based on the prime rate
Established businesses with strong financials who need funding for a variety of purposes
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