Whether you own a small company or on the threshold of starting a new venture, you need a certain amount of money. The financial assistance that a small business owner takes from a lender or bank is known as small business loans.
Basically, these types of loans are the financial agreements between the lenders and the borrowers in which borrowers agree to pay the borrowed amount back with interest within a decided time frame.
However, the size of the loan will vary from company to company and lender to lender. There are a few companies that are willing to pay more amount than others. If you are wondering why you need a small business loan, then keep reading this post till the end…
Why Get a Small Business loan?
You have probably heard the old age saying – Make Money from money! It is true. If you want your business to climb the ladder of success, you have to invest in its growth expenses. For instance property, equipment and advertising. Here are a few reasons you need a small business loan:
- Advertising & Promotion- These are a necessary investment that helps to build awareness of your brand and drive sales.
- Bill payment/supplier payment- A small business loan helps to afford your bills and payment.
- Cash flow- The loan helps a business owner at the time when they need some extra money to get through dry-spells.
- Rent- Profits and revenue are unpredictable in business. A flexible small business loan can help you to cover the expense of loan in an off-season period and in a downturn.
- Equipment- A loan can help you buy expensive equipment that is needed for productivity.
- Hiring- If your budget is tight and you need to hire an extra employee, a small business loan is a right choice to provide enough funding.
- Expansion and more- A small business loan can help in business expansion, growth and development.
Is small business loans tax deductible?
Short answer: Yes. The interest in the small business loan is tax deductible. As when you are using it for business purposes, it considers for a business expense. Because the interest deduction is from the taxes, it lowers the tax burden and makes loan repayment as little as possible. However, in order to eligible for small business tax deduction, you will need to meet certain criteria decided by the IRS.
Are small business loans fixed or variable?
For start-ups, most people would agree that fixed loans make sense. Variable rates come with several benefits like market influence and lower interest rates. But, these loans can also skyrocket as well, making it appears more like a gamble.
In short, small business loans are categorized as fixed. Banks may charge their interest rates but as these loans are backed by real estate so the interest rates are on the lower end.
Where to apply for a small business loan?
Applying small business loan needs precise consideration and knowledge. It should be something on first come first serve basis. If you are looking for a reliable partner that offers you a small business loan without any hidden charges, then Fundwise Capital can help you.
Whether you are an entrepreneur, small business owner or start-up, we help you secure the best capital along with educating you to master the growth and success of your future business. Apply in just 30 seconds and let us help you to obtain loan for your small business.