Types of loans for small business - choose the best!

To make the right choices about the loan, which will help you successfully start or develop your own business, you must first have a clear idea of ??the banks offer different loan products. Orientate themselves in their diversity by examining the conditions of issue, especially payments and the value of interest rates, a small business owner can receive a credit on the most suitable conditions specific to him and be able to conduct business more profitable positions. What types of loans are meant for small and medium-sized businesses? First of all - loans issued on current operations. The purpose of the loan - working capital (invested in the business) or purchase of capital goods - personal property. Receive money on overdraft, credit line or a traditional way - on the account. Period, usually no more than 3 years. The condition of the banks - the value of payments on loans must not be greater than 50% of the profits from the business. Almost all banks require the issuance of credit for small businesses pledge and guarantee. As a collateral review of the company or property owner - movable and immovable, cash balances, or the goods in turnover. But note that it is good in the turnover is extremely low estimated by banks as collateral. Above all - real estate. Next - investment loans, ie legal guardians and starting a business or developing a new direction or major improvements. Obtain such a loan will be more difficult, banks will carefully examine the business plan, and will require a thorough security against the loan. The loan term can be large - up to 10 years, it is possible to obtain a delay of payments before the loan period. Requiring banks and one of the basic conditions for the issue - at least a third of the business owner must invest themselves. Increasingly seen by representatives of small business leasing - a way to attract the speed and the relatively small number of documents required (can be enough documents on the number of income statement and balance sheet). When leasing a borrower takes the property (equipment, transport) in finance lease from the leasing company, which retains ownership until full payment of the loan by the user. At the end of the credit payments of ownership transferred to the new owner, lessee. There may also need to invest their funds up to 30% and most of the payments may be required immediately. Gaining popularity factoring - the bank debt repayment to the creditors of the borrower is working capital accounts of the company. The meaning of factoring for small entrepreneurs - no breaks in payment for goods sold and services and money income. Factoring can be granted for up to 3 months. But banks only require a long-term relationships credited the firm and its clients. Callback form for factoring - Letter of Credit. Bank to repay the debt the company owed to suppliers of products or services, when they presented the paper, confirming past transaction. This type of lending is typical for transactions with foreign countries (mostly), the loan term - usually 1-2 years. Be separately identified commercial mortgages. But the specific differences from the usual here are not observed. Purchased the premises - the essence of a pledge, but it must be registered as a non-residential fund. Time for which the commercial mortgage is issued - up to 30 years. Until full payment sell it or use as anything else not on the contract.