Business loans have a few advantages. By obtaining a loan, the lender does not have equity in the business. Instead, you simply need to repay the principal plus interest. After repayment, you do not need to share profits with the lender. This also reduces administrative duties by eliminating the need for shareholder meetings and votes. In addition, loans do not require the same regulations on investments.
Business loans offer several advantages. By obtaining a business loan, the lender does not take equity in the company. You are required to repay the principal plus interest. After repayment, there's no need to share profits with the lender. This also reduces administrative duties by eliminating the need for shareholder meetings and votes. In addition, loans don't require the same regulations on investments.

Lending requirements vary with each business loan provider. Typically, lenders expect good credit, collateral, and consistent monthly revenue for approval. A commercial lender might also request a detailed business plan to verify the company's ability to repay the loan.

The APR (annual percentage rate) is the annualized interest rate charged for your business loan. Typical APRs range from about 5% up to 30%. The APR on your loan small business depends on your company's financial background, assets, income, credit history, and other factors.

Repayment terms are based on the agreement between your business and your business lender. Repayment periods can range from as short as 6 months to as long as 5 years or more. To secure the best business loan suited for you, ensure the repayment terms align with your financial planning.

There are multiple options for financing your company. Below are some of the most common types of business loans:

• Business Lines of Credit: Flexible credit lines that businesses can tap into as needed.
• Equipment Financing: Business loans for financing equipment, which also serve as collateral.
• SBA Loan: Low-cost, versatile loans for small businesses backed by the Small Business Administration.
• Short-Term Loan: Small business loans with short repayment terms, usually between 3 to 18 months.

¹Biz2Credit Disclosure: See website for details. Varies depending on product and qualifications.
²American Express Business Line of Credit Disclosure: All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors. American Express® Business Line of Credit offers two loan types, installment loans and single repayment loans for eligible borrowers. All loan term types, loan term lengths, and pricing are subject to eligibility requirements, application, and final approval. This chart contains general information about the American Express® Business Line of Credit installment loan type only.