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TYPES OF
LOANS AVAILABLE

Business owners and entrepreneurs have a variety of options to fund their business beyond a traditional commercial bank loan. Discover the types of loans that are available.

Commercial bank loans don’t require entrepreneurs to turn over equity or company control. The size of the loan varies depending on the bank’s financial products. Banks normally like to see:

  • Good credit.
  • A solid business plan.
  • Ability to repay the loan.
  • Collateral.

Learn more about financial products offered by banks. [INSERT LINK TO ACCESS TO CAPITAL TALK STORY]

OTHER

Types of Loans

Line of Credit

Line of Credit is an arrangement in which a bank extends a specified amount of credit to you for a specified time. Instead of giving you a lump sum all at once, the lender sets a maximum amount, and you can use as much or as little of that money as needed. A line of credit is best suited to help cover expenses that tend to fluctuate throughout the course of a year. Read this article by Bank Rate to learn more about the pros and cons of a line of credit.

Home Equity Loans

Home equity loans are a cost-effective alternative to other types of loans because they offer good interest rates available. But you may not want to risk your family home to launch your business venture.

Equipment Lease Financing

Equipment lease financing gives you access to many types of equipment – computers, copiers, fax machines, cars, and trucks – without tying up your cash or credit lines. Although it doesn’t bring in cash, leasing reduces the amount of cash you otherwise have to raise to start.

Cash Advances From Credit Cards

Cash advances from credit cards are an easy and quick way to gain access to cash. But as a long-term financing method, they can be expensive – credit card interest rates typically run much more than you would likely pay on a bank loan.

Factoring

Factoring allows a company to “sell” its accounts receivables to an outside company at a discounted rate. This allows the company to receive funds immediately to fund operations and ease cash flow. Factoring is done by private companies.

Microloans

Microloans are smaller loan amounts designed to help business owners start or expand their businesses. These loans are more accessible to business owners who may not qualify for larger sums. Microloans often serve as a crucial lifeline for those who cannot access traditional funding. The SBA provides a summary of their loan products.  Utilize the Resource Finder to search for microloan providers.

Special State Loan Funds

Special state loan funds are available in Hawaiʻi. These funds support special needs and have unique guidelines.

TIP:

Use the Resource finder and select FINANCIAL RESOURCES AND ASSISTANCE to find organizations that specialize in providing free and low-cost financial assistance for businesses

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