Business Loans

I'm only famaliar with a few of these...

Equipment is pretty much what it says - they are loans for buying captial equipment. It could be assembly line machinery or a farm tractor. If you default the bank repos your assembly line and sells it at auction.

Gap financing usually has to do with a building mortgages. Typically if you are building a commercial space to take out a "floor loan" to cover the cost of erecting the structure and then you use short term "gap financing" as you bring in tennents until you get the space fully rented out. Once you have all of your space leased to get a conventional commercial mortage and pay off the floor and gap loans.

The SBA Microloans are for for-profit small business start-ups and can't be for more than $35,000. You can use the money for just about any business purpose except for buying real estate.

Im learning that those types of loans seem to be MORE popular if not limited to government funding.

do they carry lower interest rates?
Or do they carry less .....ehhh... 'bakclash' if you default?
What is the appeal of them?


( Im considering a small-ish loan for a photography business. Working out of my home is fine.. but I am wanting to launch a much larger then I can currently afford, business campaign/advertising marketing . I know that it will pay its self off.. I am just not sure if it is worth it at the rates that are being offered, or if I should just keep peddling at my own slow pace.. )

(sigh)
decisions decisions..

The interest rates are going to vary depending on the source of the loans more than the type. The type of loan is based on what the intended purpose of the loan is and how it is going to be secured.

For a marketing campaign you wouldn't use a Gap or equipment loan. The SBA Microloan or working capital loans could work for you. The SBA has some other types of loans that you might be able to use too (I think the SBA 7(m) loan might fit but those are usually for larger amounts.).

I'd recommend you chat with a SBA rep or someone from a group like SCORE in your area. There may be other loans/grants you can apply for that they'd be aware of. If you have an American Express card they offer small business loans too.

On a side note, I am finding several grants geared for me.

One in particular is a grant that is geared to women, minority women and womens start up companies.

THAT might be a safer route to go.
Because if anything ever happened, I would still have to repay a loan for something I may not be doing.