The hectic pace of life and the high cost of doing business can be overwhelming. It’s not uncommon for many businesses to become buried in loan debt, leading to frustration and stress. With so much going on, it can be hard to prioritize financial stability. Fortunately, several loans and programs exist specifically for those who need help with their finances. One such option are business installment loans online through Easy Installment Loans Online.
This will allow you to buy inventory or equipment without having funds upfront through an unsecured loan you repay overtime at a set interest rate.
These loans offer flexible terms and fixed and low monthly payments, making them ideal for any small business owner looking to succeed!
This is why installment business loans online are an excellent option for small business owners to pay off debt, buy equipment, or invest in their business. This blog post will tell you more about the benefits of these types of loans and how they work.
How Do Business Installment Loans Work?
Business installment loans are a type of short to long-term financing that allows you to borrow funds for your company or individual’s immediate needs. Businesses can use these loans to cover payroll, expenses, and other costs.
Installments can be paid off in regular scheduled (number of weeks, months, or years) loan payments that fit your budget. The interest rate on the loan is fixed, and the cost for funding will vary depending on your credit score. Many people use installment loans to buy property or equipment as well as consolidate debt.
What Is The Purpose Of Business Installment Loans?
Installment loans are typically used to purchase property or equipment, consolidate debt, finance your business, or make an investment. Small business loan plans can come with fixed or variable interest rates that are based on creditworthiness. So, here are a few common reasons people get business installment loans:
- Make significant investments in equipment or machinery.
- Purchase real estate or other property that will bring in steady income.
- Expand their business to increase revenue or improve operations.
- Purchase inventory or product samples needed for sales.
- Cover payroll, taxes, or other expenses.
- Pay for office renovations.
Long-term, Medium-term, Short-term Business Installment Loans
Business installment loans are a type of financing available to businesses or individuals who need quick, low-interest financing. These loans are usually for more significant purchases. However, they can be used for any purpose, including business operations, acquisitions, equipment upgrades, and more. There are three different terms of installment business loans online:
Long-term loans: A long-term loan is used for larger purchases. So, these loans can last for six years or more. These loans are typically used for investment-related purchases such as:
- expanding a business
- purchasing a new machine or equipment
- investing in a new line of business
- Building purchase or renovation.
If you want to learn more about long-term loans, look no further than our Guide to Long-Term Loans.
Medium-term loans: These loans last for two to five years. This loan type is typically used for purchases that are for daily operations, including equipment, inventory, and supplies.
Short-term loans: These loans last up to two years. This loan type is typically used for short-term operating expenses such as:
- Establishing credit
- Purchasing inventory
- Equipment loan payments
- Tax obligations
- Other costs associated with everyday operations
It is usually arranged by a bank or alternative online lender who is very familiar with businesses similar to yours.
Types of Business Installment Loans
Businesses can take out installment loans for a variety of reasons. The type of business installment (term) loan you can get depends on your needs and the type of loan that’s most advantageous for you. Here are a few types of business installment loans:
Absolutely essential to build Business Credit Scores separate from personal credit scores. Which makes getting other kinds of business loans much easier and for larger loan amounts.
These loans are secured by a vehicle, such as a car or truck. This loan is typically used to purchase a car, but it can also be used for repairs or improvements.
The majority of of startup businesses access the money needed through personal loans. So, the borrower’s personal credit score is used to obtain the business loan. The online lenders found through this website are ready to provide loans to borrowers with bad credit. So, if the bank turned down the loan, you can still get the money needed.
Also, those regular payments will build the business’s credit score at the credit bureaus. So, eventually the banks will say “Yes”.
A personal loan can be used for any business purpose, but they are often used to consolidate debt or purchase expensive items.
Commercial loans are typically used for business operations, equipment financing, purchasing real estate, inventory, and expansion.
Business Term Loans are Installment Loans
These are installment loans that have an initial “term” or duration of repayment. These loans are usually for a significant amount, are repaid over a period of time, and are typically secured by assets. Car loans, home loans, and some personal loans are all long-term loans.
It is a type of small-business loan with more flexibility than other business loans and works like a credit card. Businesses can get these loans to cover operating expenses, tax expenses, seasonal cash flow gap, inventory costs.
Businesses can get business installment loans for purchasing inventory. Inventory loans are usually repaid as a company receives payment from a customer or client.
If a business has essential equipment that needs repair, it can get an installment loan for this purpose.
A building mortgage is a type of loan where you can get money if you have an asset (the building) to give the lender as collateral. Either using the equity in your current building, or to buy or build a new building.
Business installment loans can be used to pay for higher education expenses that increase the abilities and effectiveness of the business owner to operate the company successfully.
SBA Loans are guaranteed by the Small Business Administration, which is a government agency. They provide support and financial assistance to small businesses.
SBA loans require piles of paperwork and months for approvals. So, many business owners use alternative online lenders for their financing needs.
What Do I Need To Apply For Business Installment Loans?
Whether you are looking for funding to purchase equipment or expand operations, installment loans can help you get the cash you need quickly.
The online lenders found here at Easy Installment Loans Online do not require good credit scores or tons of paperwork like the banks and government loan programs do.
However, I will briefly cover all of the items a bank might require.
Bank lenders are cautious about giving loans during the pandemic. So, it is crucial to have good credit scores, a safe business, and the willingness to offer up collateral. However, the interest rates on a secured loan are usually lower than unsecured loans.
This guide will walk through the application process and discuss some critical factors in choosing a lender for an installment loan.
Consider the following terms before applying for a loan:
Credit Scores: Personal and Business
Personal credit scores are separate from business credit scores. Use personal credit scores to obtain a business credit card or other business loan to build up the business credit score.
The score required for applicants depends on the kind of loan needed. The better your score is, the more chances you have of getting a loan. This is because a loan is usually given to those applicants with a good credit report.
Proof of Collateral
Applicants also need to offer up collateral for the loan. Collateral is usually the type of asset that can be easily converted into cash or otherwise repossessed if the loan is not repaid within a specific period.
When purchasing business equipment, the equipment can be used as collateral. However, don’t expect the equipment to provide all of the collateral needed. So, a cash down payment or additional equipment can be used to fill the collateral gap.
Applicants need to provide a personal guarantee for a business loan. This means that if the company does not pay, the person who has borrowed the money will be responsible for paying it. Startup business loans can be made more accessible by obtaining personal loans. Which can be used to repay the company installment loans.
Firstly, online business lenders usually don’t require a business plan. However, banks and government loan programs do require business plans.
Otherwise, applicants must provide a solid business plan, which will enable lenders to understand the business better. Because they are more susceptible to failure in the event of any catastrophe, lenders are usually very conservative when offering loans to small businesses.
Lenders will be more confident if they receive a business plan that contains information such as:
- Loan purpose
- Repayment term
- Applicant’s personal financial history
Business and Personal Documentation
Applicants should be prepared to provide supporting documentation for all of the information provided in the loan application or business plan. This includes
- Income statements
- Bank statements
- Proof of business ownership
- Tax returns
- Personal information
- Other necessary documentation
This will support the information provided in the business plan.
Final Thoughts on Business Installment Loans
The online lenders found through this website make loans to people and businesses with bad credit. So, forget the banks and get funded today. Installment business loans are an excellent way to borrow money. Businesses can use them if they need cash and can’t find funds anywhere else. Also, it’s a great option for borrowers who need immediate funds that come with long repayment terms.