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BerichtGeplaatst: 28-12-2019 02:29:28    Onderwerp: loans are long term loans given Reageren met citaat
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>What are business loans? Know their 7 types

Posted by nehash141 on May 27th, 2019


Finance is very essential for a business. It isn’t possible for businesses to grow and survive on their own without borrowing money. Borrowed funds can help a business expand, fulfill orders Wholesale Jerseys From China , purchase assets and generate more income from their assets. The type of finance given to businesses is called business loans.


Business loans are loans given businesses to grow. However, not all businesses have the same requirements for funds and the evolution of different businesses has led to a variety of business finance that lenders offer. These loans are generally very specific loans which can be used for the restricted purposes that they have been lent for.


The business loan interest rate depends on the type of loan that is given out. It also depends on the eligibility of the business for such loans and the financial strength of the business to repay the loan. Most lenders clearly specify business loan eligibility on their websites and these can easily be checked before applying.


These are the types of business loans:


Equipment finance:

Equipment finance can be either a lease agreement between the equipment manufacturer and the business. Generally, high cost assets are taken on lease.


It can also be a type of loan taken to avail assets such as vehicles or computers. Equipment finance is given on the entire purchase price of the asset and the repayments consist of a portion of the purchase price plus the interest.


Term loans:
These business loans are long term loans given to acquire fixed assets like land Wholesale Jerseys China , building, heavy machinery, or acquire parts to build assets. These loans are repaid over long tenures i.e. 15 years or 20 years.


Overdraft:
Most businesses own current accounts with banks to help them with additional liquidity in their day to day operations. Overdraft facility can help the business withdraw additional funds from the bank without paying a high cost on it. The interest on overdraft is charged only on the amount by which the account is overdrawn.


Cash credits:
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