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Fairfield County business law attorney commercial financing

Whether you are launching a new business or you are interested in expanding your current business, financing your business goals is probably one of your top concerns. Small business owners and entrepreneurs have several different options when it comes to securing funding for a new business venture. Some of these individuals use their own savings, borrow from their home’s equity, withdraw retirement funds, or even use a credit card to finance the business. However, many people find these options to be too risky and instead choose to take out a loan. Conventional bank loans and Small Business Administration (SBA) loans are two popular options to consider when financing your small business.

Conventional Bank Loans

Conventional loans are the most popular type of lending for small businesses. When a borrower obtains a conventional loan, the bank lends him or her a set amount of money at a fixed or floating interest rate. Payment schedules are negotiable and may involve monthly payments, quarterly payments, or annual payments. The parameters of the loan are based on the bank’s particular policies and the business’s overall credit risk. Typically, the higher a business’s perceived risk, the higher the interest rate. Conventional loans are highly dependent on personal and business credit scores. Young business owners with less credit history may not qualify for a traditional loan.

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