If you’re new to the world of small business, you may need additional capital and you may ask yourself how much is a small business loan? As a startup, you’ve no doubt incurred significant expenses and loans that help you stay afloat, but at what cost? There are several types of small business loans – all with different terms and conditions, fees, and APRs. They also require tax returns, credit checks, liens, and long waiting periods. So how do you pick the type of funding that’s right for you? How much does a small business loan cost?
Popular Types of Business Loans
Is a small business loan the right choice for you? Let’s find out!
The Small Business Administration backs this type of loan. A traditional SBA is best if you have a big-time venture you need to fund – the average SBA loan taken out in 2016 was over $400,000. However, the SBA also offers microloans, which are better for smaller capital needs. Currently the terms for SBA loans are 7-8% APR and 5-25 year payback with monthly repayment terms.
Medium Term Loan
Medium Term Loans usually offer large lump sums paid back over a 1-5 year plan, but non-bank lenders fund them. APRs vary wildly for these loans at 7-30% and repayment terms are usually monthly or bi-monthly.
Business Line of Credit
Lines of credit are easier to get than traditional business loans, but they have higher APRs (7-80%) and quicker payback terms (6 months to 5 years.) Banks offer the traditional route to credit lines, but online lenders offer smaller, more accessible loans.
This type of loan is essentially a cash advance. Banks will loan you cash for up to 85% of the amount of current outstanding invoices. APRs are 10-65% and the bank collects once you have received your accounts payable.
Are There Any Other Loan Options?
If these loans don’t seem like the right choice for you, there is another option. Pawngo is a trustworthy online pawn shop that loans small businesses cash in exchange for luxury collateral. 8 years ago, Pawngo established its online presence with the first online pawn license in the US. We accept a number of luxury items, such as high-end cars, designer bags, watches, and much more.
Contact Pawngo with Your Questions
The process is quick and painless – just fill out the application available online and you’ll hear back from us in as little as 24 hours. Pawngo doesn’t require credit checks and has low rates at just 2-10% per month, plus no fees! You also determine the term of your loan and can pay it back at any time with no penalties. When you’re ready to use the assets that you already have to fund your business, Pawngo is the way to go.