Equipment Loans

Equipment loans finance the equipment needed for business operations. The purchased equipment is collateral, with rates and terms dependent on the business's financial health.

These loans may require a down payment, and the equipment might depreciate faster than the loan's term, potentially leading to financial strain if the equipment becomes obsolete.

Invoice Factoring and Financing

Invoice factoring involves selling unpaid customer invoices to a factoring company for immediate cash. The factoring company collects payment directly from the customers. On the other hand, invoice financing uses invoices as collateral without selling them, providing a loan based on their value.

Invoice factoring can be costly and relinquishes control over the invoicing process. Both options can lead to a cycle of dependency on borrowed funds, potentially exacerbating financial issues.

Personal Loans for Business Purposes

Personal loans for business purposes are often used by startups or businesses without an extensive operating history. These loans rely on the owner's rather than the business's credit.

While personal loans can offer favorable rates and terms, they come with high borrowing costs and the risk of damaging personal credit if the business cannot repay the loan.

Business Credit Cards

Business credit cards provide a revolving line of credit, allowing businesses to draw from and repay funds as needed. They require minimum monthly payments and are typically unsecured.

These cards often have high costs, variable interest rates, and additional fees, which can quickly accumulate if not managed carefully.

Microloans

Microloans are small business loans typically offered by alternative lenders rather than banks. They are often used as startup capital for small businesses.

Microloans usually have high interest rates, making them expensive despite their smaller principal amounts.