What is a business loan?

A business loan is an amount of money a business borrows from a financial institution, with set requirements for the amount of time it will take to pay back, as well as interest rates.

Businesses get loans in order to help them start or to fund expansion. They’re one of a range of funding options for startups.

Types of business loans for startups

There are five main types of business loans that are relevant for startups:

1. SBA small business loans
2. Business credit lines
3. Short term loans
4. Invoice financing
5. Merchant cash advances

Let’s take a closer look at each one.

SBA Small Business Loans

A SBA small business loan is a loan that is backed by the Small Business Administration (SBA).

Founded in 1953, the SBA is a fe...