Nearly all types of business loans in Los Angeles will seek to help with acquisitions of some sort of debt financing at some point in time, as well as a number of working capital issues such as refinancing of loans or other business debt, consolidation of business debt, purchasing real estate, and refinancing business real estate. For your Los Angeles business, knowing your options and finding the right loan can potentially save you tens of thousands of dollars. In the following section, we will explore some of the types of business loans in Los Angeles frequently utilized by businesses.
Bank lending is a prevalent financing option for businesses in Los Angeles, regardless of their size. These conventional loans, with repayment terms ranging from 1 to 30 years, are commonly used for various business purposes, such as acquiring businesses, refinancing business debt, consolidating debt, purchasing and refinancing real estate, and supporting general working capital needs. The bank line of credit is a type of revolving fund provided by large banks, small banks, community banks, and Los Angeles credit unions. A line of credit is a form of preapproved financing without having to get further approval from the lender that a Los Angeles small business can access whenever they choose.
Conventional lenders offer SBA lending as an additional form of affordable financing. The difference between an SBA loan and a traditional bank loan is that the majority of the SBA loan is guaranteed by the US government. In the event of default on an SBA loan by a Los Angeles business, the Small Business Administration (SBA) provides coverage for the majority of losses incurred by the SBA lender. Los Angeles businesses can access funds whenever they choose an unsecured line of credit, which is another form of preapproved funds. The difference between a bank line of credit and an unsecured line of credit is that a bank line of credit for Los Angeles businesses will be secured by business assets such as accounts receivable, real estate, or inventory, whereas an unsecured line of credit doesn’t require collateral at all.
A good option for types of business loans in Los Angeles for businesses seeking equipment financing that don’t want to purchase equipment outright is to lease the equipment. Through equipment financing, businesses in Los Angeles can gain access to necessary equipment without the need to make full upfront payments for potentially soon-to-be outdated equipment. With as little as a 10% down payment, businesses can secure the equipment they need. On the Los Angeles company’s balance sheet, asset-based lending is financing that uses collateral as the basis for financing. Including both factoring lines and factoring of individual invoices, common types of asset-based lending include accounts receivable lines of credit and factoring.
For companies seeking affordable financing but having been turned down by conventional and SBA lenders in Los Angeles, alternative business loans may be a good financing option. Alternative non-bank financing has rates higher than high-interest merchant cash advances but is certainly much more affordable.