Business Loans Types of
What is a business loan?
A business loan is a type of financing that you can use to either start a business or expand an existing business. There are various types of business loans, and you can choose the type that best meets your business needs.
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Types of business loans
Term loans
A term loan is one of the most common small business loans and is a lump sum of cash repaid over a fixed period. Typically, monthly payments consist of interest on top of the principal balance. You may use a term loan for a variety of purposes, such as daily expenses and equipment.
SME loans
An SME loan is a source of funding for small and medium-sized business enterprises. An SME loan is used to meet the borrowing needs of SMEs. It is provided as a single line of credit for SMEs. It may be used for working capital or long-term requirements in addition to short-term requirements.
Equipment loans
If you don’t have the capital to purchase expensive equipment, you might want to consider an equipment loan. These loans are designed to help you purchase costly machinery, vehicles, or equipment that retains value, such as computers or furniture. Usually, the equipment you purchase will be used as collateral if you are unable to repay the loan.
Commercial real estate loans
You can finance a new office, warehouse, or retail space with a commercial real estate loan (commercial mortgage). These loans work like term loans and may allow you to purchase a new commercial property, expand an existing location, or refinance an existing loan.
