Find the Right Small Business Loan for You
Small Business Loans in Rhode Island
While there aren’t many small businesses in Rhode Island, it’s still a progressive state with a lot of full-time working individuals switching to entrepreneurship. There are a little less than 100,000 small businesses within the state offering an array of services for residents and tourists. It’s not uncommon for a business owner to need a loan at some point in their career. Business loans offer quick lump sums of cash to those who need it, allowing them to put it back into their companies.
Taking Out a Loan
Taking out a business loan could take several months and you’ll need a clear goal for where the funds will be used. Business owners need to make a plan for their money and use it only for business-related expenditures. The last thing you want is to get locked into a loan contract and blow the money on something that doesn’t benefit your company. It’s not uncommon for businesses to use their loans to essentially bail themselves out. Struggling companies often need a saving grace to pull them back up out of the hole they’ve created. The saving grace in this case would be the small business loan.
How to Apply for a Loan
For Rhode Island entrepreneurs, you’ll need a reputable bank offering business loans. Business loans are different from personal loans because the equity is tied into the company’s assets. If your business should go under and fail, you won’t be responsible for paying back a small business loan. Personal loans, on the other hand, are tied into the person’s collateral and if your business fails, you’ll be responsible for paying back everything you received or risk having collateral taken away.
During the loan application process, the bank is going to need information regarding your company, assets, future plans and losses that might have been sustained. Generally, the lender wants to know they’re giving out a loan to a prospective business owner who has a high chance of succeeding. High-risk and struggling companies may be denied their loans due to the liability that they create for the bank. Newly-established businesses may find it difficult to obtain a loan, too, since banks see newer companies as being high-risk until they are fully realized.
Interest Rates and Repayment
Interest rates on Rhode Island business loans can range from five to nine percent. The higher the interest rate, the more difficult it will be for you to pay back the loan in an affordable manner. Unfortunately, high-risk companies may only qualify for higher interest rates, so you’ll have to take what you can get in this case. Repayment of the loan is specific to your term length agreement, allowing you to have years to pay off the loan and use that money for the livelihood of your company.
Banks in Rhode Island Offering Loans
- Home Loan Investment Bank
- Coastway Community Bank
- Bank Rhode Island
- Freedom National Banks`