Business either small or big is always on the need of capital to run their operations smoothly. Requirements for proper finances for business are always on the move. Among the several reasons one might be looking for financing, some fundamental reasons are: starting a new business; expanding the existing business; or looking for short term financing for a crisis.

Before one start looking around for money sources, one need to define whether credit needs are seasonal (short term) or growth related (long term).

There are a variety sources for getting loans:

•Banks including savings banks, and commercial banks.

•Credit unions which usually have the best terms but make consumer loans primarily.

•Consumer finance companies which make higher-interest loans to higher-risk borrowers;

•Commercial finance companies which normally make loans for inventory or equipment purchases which they use as collateral for the loan.

•Small business investment companies

•Private lenders.

Unsecured business loans are usually Short term loans with high interest, and are due within a set amount of time, depending on the lending institution.

Advantages of unsecured business loans: These loans are a great option for those purchasing a business or going through short term needs for business funds, applying and obtaining such a loan is usually a simple and quick process, Although interest rates may be slightly higher since there is more risk to the lender still, these are an ideal way to finance the purchase of a business for new entrepreneurs who do not have collateral to put up.

Obtaining a business loan, requires the repaying of funds with interest over a specified period of time, and is usually based on past performance of the firm. However, the inexperience of many small business owners in financial matters often prompts banks to deny loan. In such cases, unsecured business credit can be received through small business investment companies who provide loans on reasonable interest rates and lines of credit. To successfully obtain business funds through loans, it is essential to have a well prepared and organized business plan and loan proposal.

Looking the options for business financing in today’s market, one may need to know exactly the rates and terms of loan. It is wise to be realistic, and use your diligence about what to expect before making any applications. It is only you who can decide which finance option to choose for your business because sometimes you are lucky to get financing offers and sometimes you have to take what you can get.