an forms an important part of the capital structure of the organization. Not only it provides capital to the business for running its operations and setting up new projects but business loan also provides tax benefits to the entity. Remember that the interest is tax deductible and hence the interest on the business loan can be deduced before the taxable income is generated. This offers a lot of financial leverage to the company.
There are ideally two types of business loan. One is the short-term business loan while the other one is a long term business loan. Further, there are many sub-categories in the business loan but do you know how to get a business loan? Well, here is a descriptive answer to your question.
How to Get a Business Loan?
Today, there are multiple methods of getting a business loan and the list has gone beyond banking system. Here are some usual as well as unusual ways of getting a business loan.
Banks – This is one of the most common methods to get a business loan. The banks can help you in getting a business loan very quickly and very easily. The process of getting a business loan is well defined and so are the interest rates. If you are in need of a loan, you can simply hit up to the bank near your business and fill up the application form. It is possible to avail secured as well as unsecured loans with help of the bank.
Peer to Peer Lending – This has appeared in last few years and it has gained a lot of popularity. You will notice that there are many peers to peer lending sites and portals on the web now. They can give you a quick decision and it takes just about 24 hours to decide if they can give you a loan or not. This is an easy and simple way of getting a loan if you have a good credit score.
Microloans and Government Schemes – A new type of loan has also emerged and it is called Microloan. This is often referred to as microfinancing and they are similar to the regular loans but the amount of capital is usually lower. You can check for the government schemes in your country as they provide quick access to capital for various companies under some or the other scheme. If you are basically looking for a loan for working capital then it would be a smart decision to opt for a microloan.
These are some ways to get a loan, the basic procedure to get a loan using these channels remains the same. You need to fill in the application form, attach supporting documents like the identity proof, income proof, balance sheets and other financial statements before you submit the application.
Once that is done, the financial institution will share its decision with you and on successful approval, your loan will be disbursed to you via electronic money transfer.