Even if you haven’t taken advantage of a business loan, you are likely familiar with them, at least on some level. But if you are seeking one out, then you’ll probably learn that they are not a one-size-fits-all approach. And while seeking a business loan doesn’t have to be a complicated venture, there are some basics you should be aware of when going through the process.
But first of all, let’s talk about what exactly a business loan is, and how it can benefit you.
What is a business loan?
A business loan provides you access to funds whether you are looking to better manage your business cash flow, need some additional funding for growth, want to make a significant purchase, or some other reason entirely.
When considering a business loan, it’s important to know exactly what you want it for. While this sounds like an obvious bit of advice, think of it like this: you don’t want to be in a situation where you are borrowing more or less than you need. It’s true that you can tailor the repayment cycle to your business cash flow, but borrowing only what you need will help keep your business on track.
Know the specifics
The loan amount and repayment cycle is only part of the borrowing process. You are also going to need to know whether you want a secured or unsecured loan. The big difference? A secured loan means you are going to provide an asset as collateral for the loan, while this is not the case for an unsecured loan. However, this lack of asset as collateral means you are likely to pay higher interest on the loan.
Additionally, when it comes to interest, you will likely be discussing whether you want a fixed interest rate, which means the interest rate is established for the lifetime of the loan, or a variable interest rate, which means the rate might fluctuate, or even increase.
Talk to the professionals
These are only some of the nuances to consider when thinking about a business loan. While the application process is simple and fast, you can also feel at ease by having a conversation with the business lending specialists at Red Rock. They can help you find the right solution by getting to know your business and nailing down what makes the most sense for you.
For more information on applying for and obtaining a business loan, get in touch with us today.