From the course: Financing Your Business
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Credit and financing from top sources
From the course: Financing Your Business
Credit and financing from top sources
- Now I want to explain how you can get top-tier capital for your business. Let's talk about what it takes to get credit and get financing from those top-tier sources. Banks and credit unions tend to offer the lowest cost financing for small business, and they offer it in one of several ways. One is a term loan. A term loan is a fixed amount of money borrowed for a fixed period of time. Typically it's with a fixed interest rate, but not always. Let's say for example, you borrow $250,000. You have five years to pay it back, and your interest rate is 8%. That's a term loan. The advantage of a term loan is that it's predictable, and you can borrow what you need to accomplish whatever it is you're trying to accomplish for your business. However, keep in mind, with a term loan you get the funds right away, which means you're paying interest immediately, even if you don't spend it right away. A line of credit by…
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