What Are Business Loan Services?

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Running a successful business often requires investing back into your business so it can grow and continue to operate at peak potential. Extra tools and services may be necessary for such growth. In order to have access to working capital, you may consider one of many business loan options. Business loans are a way to increase cash flow so you have the resources to invest in your company and remain competitive.

But what business loan services are available? Depending on your company’s needs, there are different loan options suited to your unique needs. Let’s explore some of the options available so you can decide which business loans in Oregon are right for your growing business.

Term Loans

A term loan is a monetary loan for a specified lump sum of capital that has a specific repayment plan. A term loan can have either fixed or floating interest rates. A floating interest rate moves up or down according to the market or index, while fixed rates are unchanging throughout repayment.

Term loans can be advantageous to your business management because they have pre-determined terms and conditions and are not variable. You agree to a specific amount to be paid back by a certain time. With a regular repayment schedule, your rates and monthly payments are locked in. This makes financial planning easier and standardized.

This type of loan typically has lower interest rates. Because term loans tend to be longer-term loans, ranging from 3 to 25 years, interest rates are comparatively lower than short-term loans. With this increased cash flow, your business can purchase the tools or services it needs to expand. Your business can use this extra capital to increase the scale of operations by purchasing new tools, machinery, equipment, or by hiring new employees.

Maybe you have been wanting to add products or services but have previously lacked the capital. A term loan may be the key to keeping your business up-to-date and equipped with the necessary resources to reach your desired market with the products or services you care most about.

Line of Credit

Another viable option is opening a business line of credit. Though term loans can be easier to manage with their fixed plans, a line of credit offers flexibility. A line of credit is a credit limit you can borrow against whenever necessary. Like a credit card, you can draw and repay the funds as many times as necessary as long as you don’t go over the approved credit limit. This also means that you only pay interest on the amount you draw and not on the entire line of credit.

These loans are offered as “secured” or “unsecured.” Typically, if the loan falls below a certain amount, the loan is unsecured, and you don’t have to put up anything as collateral against the loan. There are some exceptions. With larger loans, you may have to offer the lender something as collateral in case you default on the loan.

The main advantage of a line of credit loan is its flexibility. These loans are typically short-term loans that provide quick access to cash. They can be paid off in minimum monthly payments or by paying off the entire outstanding balance. You’re also not required to use the entire amount loaned, and you can pay off the balance early. However, these flexible terms can result in higher interest rates than a term loan.

A business may want to use a line of credit to help manage business operations and accounts receivable. This easy access to capital makes a line of credit ideal for immediate revenue-generating ventures such as purchasing inventory, making critical repairs, or bridging a cash-flow gap. It can be a quick stimulant for expansion and help your business have immediate access to successfully fund short-term needs.

SBA and USDA Loans

A Small Business Administration (SBA) loan is a government-backed loan provided through private-sector lenders for small businesses. A USDA loan is a mortgage loan offered to rural property owners by the United States Department of Agriculture.

These types of loans have eligibility criteria but can be a valuable asset for those who qualify. They are designed to help smaller businesses receive much-needed credit. If your business meets the criteria, it can be used for fixed-asset acquisitions to assist the growth of your small business.

Commercial Real Estate Loans

An expanding business may be looking to invest in commercial real estate and open new or additional locations. Are you a small business operating from home that has grown too large and requires a brick-and-mortar location or an established business looking to expand your market by adding another location? Maybe your current space needs a renovation? If so, a commercial real estate loan will help cover these costly up-front investments.

Commercial real estate is income-producing property that’s used for business purposes rather than residential purposes. This can include retail, office buildings and complexes, malls, apartments, and hotels. A commercial real estate loan is a mortgage secured for this commercial property.

These loans are flexible and can be personalized to meet your specific needs. That means a lender, such as a credit union, can offer a custom lending solution that includes flexible financing and payment scheduling, as well as personalized rates. Will your business benefit from a fixed or adjustable rate? Do you require a long-term payment schedule? Discuss with your lender what you need and which options are best suited for the growth of your business.

If you have any questions about which loan options are best for you, contact our helpful team at Central Willamette Credit Union. We understand your passion, and our goal is to make sure your business has what it needs to thrive. Talk to us today about which business loans Oregon is right for you.

With a variety of business loan services available, your business can grow strong for many years to come.