Things worth knowing about small business loans

Things worth knowing about small business loans
December 17 18:24 2020 Print This Article

Small businesses often have to deal with limited resources, reduced working capital, and cash flow problems. The good news is there are lenders who offer funding specifically for small businesses. In general, Accord Financial business loans for small businesses can be used for about anything – from purchasing inventory, to repairing existing machinery and planning further expansions. So, how do small business loans work? In this post, we are sharing some of the basic aspects worth knowing.

How to apply for small business loans?

There are many financial services that deal in small business loans. In many cases, you can expect approval in a day, depending on how much you want to borrow and if the loan is a secured or unsecured one. As for repayment, small business loans can be repaid through weekly payments, which includes the interest. 

What are the requirements?

Most lenders in Canada have a fixed set of basic requirements for small business loans. The concerned business should have been incorporated in the country, must have been in existence for 2 years at the least, and should have a steady source of income. In addition to these, some lenders may require the business to earn a certain amount through annual sales. While credit score is not entirely important, but average credit standing is desirable. Many small business loan services offer approval often in just 8 hours, and you can expect to get the loan amount within one to two business days. 

What about term and interest rates?

These aspects may vary between lending services, but in general, most small business loans don’t have a term exceeding 18 months. The minimum term for such loans is 3 months. The interest rate is dependent on many factors. Most small business loans are unsecured, so the interest rate can be a tad high, but if you are opting for a secured loan, where you are using your existing assets or inventory as a collateral, you can expect a lower rate. Performance of your business, overall credit standing, and sum required, are other aspects that may have an influence on the interest rate. 

Final word

For many companies, small business loans work just fine for their immediate financing needs. With flexible terms and conditions, there isn’t much to worry about, and as long as your business is running smoothly, you can repay the loan in time without any hassle. Just make sure that you are aware of the terms & conditions. 

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Chan Francesca
Chan Francesca

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