Types of Business Loans in Bowling Green, OH, Set Beside a Marketing Budget and Five Other Bills

Equipment financing is a loan when the business borrows the price and owns the machine from day one, with the machine pledged as collateral. It is a lease when a funding source keeps ownership and the business pays for use. For a bar's $8,740 package of stand-mounted speakers, an amplifier and a mixing board, an invented 30-month loan at 11.95% runs $338.45 a month and the 30 payments total $10,153.50.

Speakers wired into a ceiling are a different matter: running that wiring is property work outside this site, so the request covers the equipment and leaves the installation to the bar's own contractor.

With a merchant cash advance, the business gets cash today and gives up a slice of the card sales it has not made yet. It is not a loan: a provider buys the receivables and collects a fixed percentage of each day's card receipts until an agreed total is met. In an invented case, $12,000 at a 1.29 factor means $15,480.00 to be collected; at an 11% holdback on $1,050 of daily card sales, $115.50 goes to the provider each business day, about 135 business days in all (our arithmetic, rounded up).

An office whose income arrives mainly as insurance payments rather than card sales gives a provider little to collect from, so a therapist hire there can be weighed against a term loan or a credit line instead.

An offer can set a weekly payment instead of a monthly one. Price a $4,860 repair of two powered treatment tables and an ultrasound unit over one year at a 10.9% annual rate, invented figures both times:

In this invented case the weekly calendar carries $16.72 less interest, because principal falls a little sooner. The bigger difference is in the bank account: 52 smaller debits land every week, including weeks when insurance claims pay late, while a monthly payment can be timed after the office's main deposit. The offer documents state the calendar.

Supplier bills come in two kinds, and the product follows the kind:

• A one-time order with a clear end, such as stocking a new product line: a working capital loan or inventory financing.
• Invoices that repeat each month at uneven sizes: a business line of credit, drawn and paid down as they come.
• A supplier that sells the equipment itself: equipment financing, with the machine as collateral.
• A large card-sales business that wants payments to follow its receipts: the merchant cash advance, which is not a loan.

Marketing is a supplier bill too. An invented $11,600 push of print mailers, paid search and a website rebuild, borrowed over 12 months at an annual rate of 13.9%, comes to $1,040.98 a month and $891.76 of interest. The schedule ends whether or not the campaign pays off, which is worth weighing before signing.

Think of a business term loan as the whole amount handed over at the start, then cleared in level monthly pieces until the agreed last month. For an existing business adding a second location, the sum can cover fixtures, furnishings, equipment and the lease deposit; the building and any construction stay outside this site. In this invented case $96,500 over 72 months at 10.15% runs $1,795.05 a month, $32,743.60 of interest across the term.

The business term loans page prices rental tents, a veterinary X-ray unit and a music school's pianos.

A business line of credit is a limit the business draws from as needed, paying interest only on what is out and freeing the room again as it repays. If insurance claims worth $14,200 sit unpaid for 45 days, an office with an invented $25,000 limit could draw that amount and owe about $222.34 in interest at a rate of 12.7% (our arithmetic, simple interest, cleared on day 45), leaving $10,800 of the limit open meanwhile.

Draws, renewals and limits are covered on the business lines of credit page; payroll between deposits is on the working capital loans page.