What is Business Loan ?

A Business loan is a financial product where a lender provides funds to a business, which must be repaid over time with interest. Businesses use these loans for various purposes, such as expanding operations, purchasing equipment, managing cash flow, or covering operational expenses.

Types of Business Loans:

1. Term Loans – A lump sum amount repaid over a fixed period with interest.
2. Working Capital Loans – Helps businesses cover day-to-day expenses.
3. Equipment Financing – Specifically for purchasing machinery, vehicles, or equipment.
4. Invoice Financing – Uses unpaid invoices as collateral for short-term funding.
5. Business Line of Credit – A flexible loan where businesses can borrow as needed.
6. SBA Loans – Government-backed loans with favorable terms (available in some countries).
7. Merchant Cash Advances – A lump sum repaid through a percentage of daily sales.

Key Factors to Consider:

• Interest Rates – Fixed or variable, affecting repayment costs.
• Loan Tenure – Short-term (months) or long-term (years).
• Eligibility Requirements – Revenue, credit score, and business history.
• Collateral Requirements – Some loans require assets as security.