What kinds of loans are available for small business financing?

Terms vary by lender, but in general, there are two basic types of loans: short term and long term. Short term loans have maturity (payback) periods of up to one year, and may include accounts receivable loans, working capital loans, and operational lines of credit.

Long term loans are typically those with terms of more than one year and less than seven, although equipment and real estate loans can go much longer. Long term loans may include purchase of facilities, construction, real estate, vehicles, equipment, furniture, etc.

Before you apply for either a short term or long term loan, you need to calculate the exact amount of money you need, the purpose of the loan, and prepare a written proposal to the lender that includes this information, as well as your credit worthiness in repaying the loan.