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Business loans are special loans for small business owners but to get a business loan, a good credit score is required. A 750-credit score is considered to be a great credit score and in order to apply for a small business loan—the minimum credit score of 620 is required. A credit score is an indicator of loan repayment history, ability to man

Secured loans are provided against collateral—whereas unsecured loans are quickly processed and are simpler in nature. Both have its own advantages, so it depends on the type of business and duration for which the loan has been sanctioned. A secured loan is easier to get and holds lesser risk for the lender. It will also have lower interest ra

The average business loan usually is provided for a maximum term of 7 years. But there are other ways of obtaining a business loan for a longer term—such as augmenting the collateral with real estate or looking into programs that are available in the market like the SBA 504. The loans lent by SBA can last from three to 25 years or more.

Most business loan lenders offer loans to borrowers with a credit score of 500 to 650—however there are also few lenders who do not require a minimum credit score before lending the loan. Lenders also look at the strength of the business rather than credit history. Annual revenue, time spent in the business and absence of bankruptcies are the

Before taking a loan, decide its reason—it can be to start a business, expanding an existing business, or other reasons. The type of loan that would suit purpose must also be decided before opting for a loan. After analyzing all the above factors, the best lender for the type of loan can be then narrowed down.

The factors determining the amount of loan for starting a business are—The personal and professional profile, potential of the project, financial capacity of the borrower, borrowers knowledge of the market, the industry to which the business belongs, and the risk and competition involved. There are banks that provide small business loans for w