Types of Loans
Financial institutions and banks can help by providing funds through personal or commercial loan.
Personal credit examples include car loans, credit cards and property mortgages.
Commercial credit usually are some sort of business loans, here below are some options:
Short-term loans are one of the most common types of business loans and are generally for term shorter than one year.
They can temporarily provide working capital for a business in need of liquididy,
and are usually paid in one unique payment when inventory or accounts receivable are converted into cash.
Intermediate-term loans are often used for a startup a company,
the purchase of equipment, expansion or to increase working capital.
Terms range from one to three years.
Long-term loans are generally obtained for major capital improvements,
the acquisition of fixed assets and business startups.
The loan period extends over periods of three to five years
and is usually based in part on the life of the asset financed.
Loan repayment schedule is usually monthly or quarterly.
A line of credit provides you the ability to borrow money repeatedly,
up to your credit limit without having to reapply.
A line of credit is very important for companies
which have seasonal fluctuations.
The lender usually conduct a review once a year,
when the borrower is requested to provide updated financial statements.
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