- Long Term Loans: Long term loans are the most common and are used for business expansion. They are typically repaid on a monthly basis and are for larger amounts that short term loans. Additionally, long term loans generally have lower interest rates that short term loans.
- Short Term Loans: Short term loans are a better fit for companies that need to build up their inventory, raise cash for accounts payable, or complete small projects. These loans are usually for an amount under $100,000 and are repaid in full at the end of the term.
- Lines of Credit: A line of credit is useful when a company frequently experiences short falls in income. The post warns that interest rates on a line of credit can be high, so a line of credit would not be useful for a company wishing to expand or improve an area of their business. Most banks will require the similar information for line of credit approval: past two years individual and corporate tax returns, a completed personal financial statement, good credit, etc.
- Alternative Financing: Alternative financing can be anything from crowd-funding resources to cash advances.
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