Small Loans Online
Small loans are short term loans. Small loans can be obtained to boost business capital. Banks provide loans to many entrepreneurs who have identified business opportunities and are ready to enhance their business prospects. However, few entrepreneurs manage to get small bank loans. This is because of difficult regulations such as collateral that cannot be met by many.
The common sources of small loans are:
Bank: To get a loan from a bank, you need to prepare your case properly. You should have cash statements so that they are sure you are able to repay the loan within the stipulated period. The requirements such as collateral make it difficult to get the same. In addition, the government, through the SBA, may collaborate with banks to offer small loans.
Friends and family: It is a major way to get small funds because you can get a loan from a family member or friend at very favorable terms. In case you do not clear the repayments on time, it will not influence your credit rating in any way. However, the terms and conditions of such loans should be agreed and respected by the borrower and the lender. This enhances trust among the concerned parties. It is important to sign an agreement to avoid problems. This is dependent on the amount you want to borrow and what they have. It also depends on trust and the strength of your relationship.
Credit cards: With credit cards, you pay an initial fee to get quick and easy loans. Credit cards do not ask for collateral and other requirements. The small loans are also quite simple to get. However, they have high interest rates.
Government loans: Small businesses loans are offered by the Small Business Administration (SBA). Funds are given to qualified borrowers through financial agents such as banks. The interest rates are low and the repayment period is long. They are thus difficult to get due to stiff competition and can take a lot of your time.
Advantages of securing small loans from banks:
They are convenient and easy to get. Because banks hold a lot of customer deposits, funds pose no problem. If you are a consistent customer of any bank, you will find it easy to secure a small loan.
There are a variety of loan options available. Majority of the banks advertise their loan products to the public. Therefore, you can easily get first hand information on the offers of different banks. You are then able to compare various offers and ultimately get the best deal.
Banks provide loans at lower interest rates than other lenders and credit cards.
Disadvantages of getting small loans from banks
The loan application procedures are long and demanding. They also require collateral for security purposes. This makes it difficult for many people to get these loans.
Banks prefer existing and well established businesses. This makes it difficult for small businesses to acquire small loans.