How do business loans work

As the very name suggests, business loans are intended for businesses or business owners. There are different types of business loans.  Below we list the four types of loans our network of lenders specialize in:

  • business line of credit
  • loans based on revenue
  • Business term loans
  • merchant cash advance

Business line of credit

It is a credit that can be obtained on a daily basis.  A borrower can have a line of credit ranging from $2,000 to $100,000. Interest is paid only on the money withdrawn. Usually there is a six-month period per draw to repay the loan.
A line of credit is a very convenient way to finance a business. The funding is there when needed, but it doesn’t have to be used at all. It’s there, waiting for emergency.

Business loans based on revenue

It is a type of loan where investor lends capital in return for a small percentage of the business’s gross revenue.
The business  usually pays a fixed fee on top of the repayment.
Both businesses and investors benefit from revenue growth and both suffer when revenue declines. The installments vary, depending on the gross revenue. Our network of lenders offers loans up to $250,000. The loan will have to be repaid within 18 months.

Business term loans

A term loan is a loan that has a specified repayment schedule. The borrower has a predetermined end date to repay the loan.  Small fixed fees may also apply. Borrowers can opt for daily or weekly payments based on the business’s revenue. Our network offers up to $250,000. Repayment end date is 24 months

Merchant cash advance

A merchant cash advance is a sort of a payday loan lent to businesses. Borrowers don’t repay the loan (which technically is not a loan but an investment) in a traditional way but rather as a percentage of future credit card or debit card sales. Remittances are drawn from customers’ card purchases on a daily basis until the obligation has been met. This is a very convenient way to secure cash. Repayment amounts are different based on the business’s sales volume. Slow sales, low repayment amounts, Busy sales, large repayment amounts.