No one ever said being an entrepreneur was easy. Whether you are in the midst of getting a startup going, expanding your current operations or restructure, you could no doubt use extra funding in the form of a small business loan.
Startups are at a particularly difficult place, in that – traditionally – it has been difficult to get a loan before you have established a track record. Thankfully, this is changing as the government works to encourage small businesses through new loan programs.
In addition to government incentives for business lending, banks are also beginning to see the advantage of making small business loans.
Read on for more information on the ins and outs and the benefits of business loans.
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Small Business Loan Programs
The type of loan that you take out will be dependent upon your personal situation and needs. The government has enacted new programs which offer small business loans that are tailored for businesses who are in startup or expansion mode.
The big advantage to a government-sponsored loan is that you are not required to provide security, nor do you have to bring on a third-party guarantor.
Being able to get a loan without collateral relieves a lot of stress for small business owners.
Low Interest Rates For Your Small Business Loan
Another advantage of government-guaranteed business loans is that they are able to offer lower interest rates then conventional loans.
The interest rates for this type of loan are not based solely upon the loan amount. Rather, the rates are determined by looking at a number of factors including the viability of the business, current financial situation, the length and terms of the loan and personal credit worthiness.
In addition to having low interest rates, the fees associated with processing this type of small business loan are typically fairly low one-time payments.
Repayment Options For Your Small Business Loan
Banks are able to work with the government programs, or on their own, to offer a variety of repayment plans for their small or micro-business loans .
These loans are designed to take into account the cash flow needs and budgeting complexities of small business operation.
Payment plans may be designed to match cash flow expectations, increasing or decreasing EMI to reflect financial conditions. A company may also elect to use a bullet payment plan.
Tax Benefits For A Small Business Loan
The Income Tax Act provides for tax benefits from small business loans, allowing tax exemption for a certain amount of the profit that is used to repay the loan.
These tax savings can be of great benefit to small business owners.
Growing Your Business
Financing is the lifeblood of business. Businesses not only need access to a regular cash flow; you also need to be able to access funds when you are in need of new equipment, an expanded facility or other emergent needs.
You may also need a cash infusion during times of emergency or to help you recover from a loss.
Whatever your business’s needs, there is a small business loan program to help so Google to find an advisor in your area.