Confused about the different types of loan available for your construction business? Click here to find out about 4 which could help you today!
Every business out there will need to take a loan at some point. It does not point in any way to the success or failure of the business; it just makes operations a lot easier for the managers and other personnel. If you are in the construction business, you might be wondering about some of the loans you could take out as a business owner. Keep reading to learn about four of them.
Secured Business Loan
This is one of the most commonly available loans for businesses, as well as being a great option for loans for construction companies. With a secured business loan, you nominate something to be used as collateral in the event that you are not able to make a repayment. Common types of collateral include things from your personal life such as your house or your car. While you do run the risk of losing these assets, it is fairly easy to acquire this loan and the interest rates are generally not too bad.
Unsecured Business Loan
You could also apply for an unsecured business loan. With these, you do not have to provide collateral which in turn means that none of your assets are at risk if your business folds while the loan is still outstanding. However, because of this, investors and finance companies are less likely to give out unsecured business loans as it means that they might lose out.
Need a very specific piece of equipment for an upcoming job? What you need is equipment financing. This is a very specific type of loan used by people in industries like construction. If you have a piece of equipment to buy which is out of your current budget, take out an equipment financing loan so you can have it on hand.
Merchant Cash Advance
Finally, there is the option to take out a merchant cash advance. This is a flexible loan which is used in conjunction with a card terminal. Repayments on the loan are taken from a percentage of each transaction you then make. This type of loan is good for financial emergencies but is not ideal for long-term loans or expansion. If you need to dig someone out of the hole quickly, a merchant cash advance might be the perfect lifesaver. It is also a good choice if you have particularly poor credit, a factor which might inhibit you for one of the loans above.
Looking through the various loans available to your construction company might seem difficult but it is actually easier than you think. Identify what you need most from the loan and that should help you determine which one you can get the most from; don’t be afraid by the interest or the repayment scheme. The right broker will work with you to help you pay off the loan in a way which is efficient and cost-effective for everyone. View the loan as a tool you can use to make your business the best it can possibly be.