Whether you want to start a new business or you want to expand an existing one, you will need to arrange for more financial resources to meet the growing demand of your business. The only way you can gather those financial resources is to apply for various forms of business loans. If you own a small or medium-sized business, your best bet will be to apply for an.
There are plenty of ways you can use to get an SME loan, let us have a look at 5 different ways of getting an SME business loan that most businesses prefer.
- Traditional Brick-and-Mortar Banks
Traditional Brick-and-mortar banks are still considered the first option when applying for an SME loan. This is because they can offer a large amount of money at very competitive rates. The only problem most SMEs face here is that they require a lot of collateral and an excellent credit history.
- Credit Unions
The other preferred way of getting an SME loan by most small and medium-sized businesses is by becoming a member of a credit union and apply for a loan. Although the loan approval rates of these credit unions are twice as compared to the traditional banks, but they can offer limited loan amounts and for a shorter period of time.
- SBA Programs
Although SBA or Small Business Administration runs various loan programs, the 7(a) Guaranty Loan Program is most preferred by the small and medium enterprises. You have to keep in mind that SBA is not a direct lending institution; rather it offers government backing and surety to different lending institutions so they feel safe and secure to lend money to riskier businesses.
- Online Loans
Over the past few years, the trend to get SME loans from various online lenders has increased manifolds. This is because the process is very simple and quick. However, the online SME loans are offered at higher APRs.
- Close Friends and Family members
If the amount of money required is not huge, you can also seek financial help from your close and trusted friends and family members.