If your business has good credit and a decent business history, with several years of tax returns and business income, a conventional bank loan may offer you a better financing deal than SBA loans. If your business can qualify for a conventional bank loan, you may be able to get a lower interest rate than you would with an SBA loan.

Here are some types of conventional bank loans for small businesses.

Small business term loan

This is a simple type of small business loan that works like a mortgage: you borrow a lump sum of money and then pay it back in fixed payments over a period of several years. The advantages of a business term loan typically include lower APRs and larger loan amounts, but these loans can also be harder to qualify for. You will usually need to provide detailed details of your business finances, have a good credit score and may be required to provide collateral (such as real estate or business-owned property).

Small business line of credit

A business line of credit works the same way as a business credit card: it’s a revolving line of credit, not a lump sum debt. You can use your line of credit to borrow as much or as much as you want (up to a certain credit limit) and then pay it back over time in a flexible way (while being aware of interest costs).

The flexibility of a business line of credit can make it a great choice for working capital and covering short-term costs like wages and inventory, and lines of credit are often easier to qualify for than business term loans. But APRs on this type of short-term debt are typically higher than on a larger, longer-term business loan that’s backed by collateral.

Equipment financing

Small businesses often need to purchase business equipment, whether you need commercial-grade stoves and walk-in refrigerators for your restaurant, or a backhoe for your construction company, or new laptop computers and monitors for your business . of consultancy.

Equipment finance loans can help your business buy the tools of the trade and productivity equipment you need to make money. And a big advantage of this type of business bank loan is that you can often use your business equipment as collateral, which helps you get a lower interest rate, just like when you use a car loan to buy a car .