When you think of getting money for working capital or refinancing debt, do the traditional bank loans come to mind first? It’s not surprising since these loans are among the oldest and well-respected in the industry. Fortunately, they are continually evolving, giving small business owners a wide range of choices. You might consider inquiring with your existing bank to see what they offer. Many banks offer savings opportunities for those who already have their business checking and savings business. For borrowers who are willing to connect their loan payments to an existing account, they may even reduce the interest rate!

 

Whether you consider a brick-and-mortar bank loan or choose one of the newer online banks for financing your business, you’ll need to know how long you need to pay the loan back. There are three types of term loans popular with small businesses, from short-term loans (which can come with a higher interest rate but get you funded fast, to medium and even long-term loans.) Depending on how much you want to borrow, and what your monthly payment amount needs to be, the bank should be able to help you find the term loan that is priced right for your budget.

 

 

How do online loans differ from traditional loans? It could be a number of factors, but the main difference is that the bulk of the loan application process is done online. A typical online lender will not require you to come into the lender in person to verify or complete paperwork. In fact, many online loans are offered by companies who don’t have a physical storefront to visit.

 

Online loans vary in scope, price, and purpose, but it is assumed that they are more efficient and can produce a quicker turnaround from application to funding. Many can also provide you with a pre-approval, to let you know if you’ll have good chances of qualifying, your general loan amount, and the costs – before you ever apply. In return, online loans are typically more expensive, as they might not go through the same vetting process as a traditional lender. Some traditional banks may offer 100% online loan products, as well, including the more popular short-term loans.