Comparing the Pros and Cons of Small Business Loans

Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What is a Business Loan?
Benefits of Small Business Loans
1. Expedite Your Business’s Growth
2. You Don’t Have to Dilute Your Equity
3. Overcome Cash Flow Issues
4. Flexible Use of the Funding
5. Can be Less Costly Than Other Forms of Borrowing
Disadvantages of Small Business Loans
1. Extensive Application Process
2. You Could Lose Assets if you Default on Payments
3. You Will Need a Strong Credit Profile
4. You May Not Get the Money for a While
5. Lack of Flexibility With Repayments
Weighing the Pros and Cons
Different Types of Business Loans
SBA Loan
Microloans
Business Credit Cards
Business line of credit
Term Loan
Merchant Cash Advance
Commercial Mortgage
Equipment Loan
Invoice Factoring
Invoice Financing
Alternatives to Business Loans
The Takeaway
Frequently Asked Questions
About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
Share this article: