Business loans are a viable option for new and established businesses. A business loan might be used as working capital to buy inventory, fulfill orders, buy machinery, develop real estate, and other operational needs.

The best way to start thinking about a business loan is to answer the following questions:

  • How much money do you need?
  • How will the business use the money?
  • How fast do you need the money?
  • How quickly can you repay the loan?
  • What is the financial shape of your business?
  • How much collateral do you have?

If you want lower fees and better rates, consider a business loan with a credit union. Since credit unions are nonprofit institutions, they are not motivated by paying dividends to stockholders. Credit unions are nonprofit institutions whose owners are the customers.

Credit unions offer the following types of business loans:

  • Commercial Real Estate Loans
  • Commercial Loans
  • Business Lines of Credit
  • Business Auto Loans

Credit unions operate much differently than banks and other private lenders. Large banks are profit-driven organizations; therefore, profit is the primary goal of any transaction. Credit unions are not-for-profit financial cooperatives and are among the most stable financial institutions in America. The overall cost of running a credit union, therefore, is much lower. The nonprofit aspect of credit unions allows for loans with lower interest rates and minimal extra charges. Credit unions exist to serve the needs of their members, who are also owners.

Business Loans for Growing Businesses

A business loan aims to assist in business growth and increased income. The right loan amount is pertinent to purchasing the necessary supplies or inventory. A loan from a credit union gives you the resources to furnish your office, gather supplies, or repair machinery. The proper equipment helps to increase production and service. Once you put the basics in place, you increase your revenue potential. Your business remains at a standstill if you are unable to purchase new inventory or maintain equipment.

Business Loans to Stabilize Your Business

Most companies need an infusion of capital to grow. A business loan helps cover the extra cost while allowing owners to maintain financial stability. Another benefit of a business loan is the ability to remain financially stable when large purchases are needed. A small business may provide a steady source of income but may not provide enough extra income to cover additional expenses. A business loan solves this dilemma.

Business Loans and Personal Financials

Many people sacrifice their personal lives for the sake of their business. Some individuals may borrow against their own homes to grow their company. It is safest to keep your personal and business finances separate. A business loan allows you to keep personal and business financials separate. Separating personal and business finances is essential for business owners. The fear of losing personal assets may delay the growth of a viable business.

Business Loan Assistance

Along the lines of a personal approach, credit unions tend to get more involved with their customers. Credit union loan consultants take an interest in your goals. They want you to succeed. Advice and resources are a part of the credit union business loan process. If you run into complications, a loan advisor at the credit union can offer ideas to remedy the problem. You do not have to figure out everything on your own. Enjoy the extra attention that is a part of credit union lending.

Business loans are a big decision for entrepreneurs. Repayment fears often discourage the initiation of the business loan process. These loans, however, can be beneficial in many ways. The option to use a credit union increases the chances of having a positive experience.

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George Meszaros is the editor and co-founder of Success Harbor where entrepreneurs learn about building successful companies. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. George Meszaros is also co-founder of Webene, a web design and digital marketing agency.