Business Loans
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Posted On :
Nov-09-2011
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Article Word Count :
363
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Ever heard the saying, "It costs money to make money"? The principle of borrowing money from banks and other credit to make money is a relative basis since the beginning of the trading day.
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Existing entrepreneurs want their businesses to expand, buy more inventory, or even hire more employees. New entrepreneurs need capital to all the balls rolling. Many times companies take loans just because they can. It helps build a good credit. In discussing the application of a business loan, one must look at the different types of loans available. Many times, do the reasons why your company is a loan do not feel you have grounds for a bank loan. Here are a few examples of the types of loans available and the functions that these loans are used for:
Short-term loans are usually used for short-term working capital for a business temporarily in need of cash. These loans are based on seasonal variations and other short-term problems that a business may encounter. Usually these loans are paid within one year.
Intermediate loans are often used for companies that have been launched. These loans can be used to build inventories, buy equipment, or increase working capital. Working capital is money needed for business purposes such as paying employees, maintaining a good over-head, and other business needs.
Long-term loans can be given to entrepreneurs who are well established and want to increase their fixed assets, related to acquisitions and expansion. Long-term loans can be given to new entrepreneurs, as well. Usually for the purchase of land and buildings, construction work, and long-term working capital, these loans have terms that run 3-5 years.
The government small business loansavailable through financial institutions, as well. The government guarantees the loans if certain criteria are met regarding the company and the entrepreneur. These types of loans can be used for several reasons: the purchase of land or buildings, new construction or expansion, equipment, machinery, furniture, fixtures, goods and materials procurement, and existing business debts that have higher rates and unreasonable terms have to refinance. These loans can be used for both short and long term working capital as well.
Most commercial banks, credit unions, and even entrepreneurs with investors expect a well thought out plan with respect to their business. These business plans should include the use of loans in a very decisive manner.
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Article Source :
http://www.articleseen.com/Article_Business Loans_102057.aspx
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Author Resource :
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Keywords :
loans, mortgages,
Category :
Finance
:
Finance
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