Single moms, like a lot of other people who are worried about their jobs, often explore the possibility of starting a small home business. There are many factors to consider, including finding money to cover operations of the business.
Personal funds and funds used for the business should be kept separate. If the business does not succeed, the personal savings of the single mom turned business woman could be wiped out.
One of the options for a single mom to explore to access cash for a business is a commercial loan, or short term business loan. If the loan can’t be repaid within the set period, it is rolled into another loan. The commercial loan allows the business to have access to funds that will be repaid once money starts coming in. It is, however, considered a short term loan and the borrower should be prepared to show the lender a cash flow statement along with the business plan.
Commercial loans often have the advantage of other type of loans because they offer a competitive interest rate. That keeps the total amount of money that has to be repaid lower.
A commercial lender must be convinced that the business is credit worthy before they are willing to approve the commercial loan. The applicant will have to have good credit history and be prepared to show the lender that the business will be able to repay the commercial loan.
The commercial loan is subject to the same laws and guidelines as any other type of loan.
Commercial loans are only one type of loan that may be available for your business. Before you apply for a commercial loan, make sure that you are aware of the other types of business loans that may be available. This knowledge will not only help you choose the type of loan to apply for, but your knowledge about loans when discussing your options with your chosen lender will further your credibility as a business woman.