What You Need To Know About Loan ? Almost nothing in life is free and loans are no different. Loans are basically a seemingly non complicated way of lending and borrowing but if one were to take the time to read the fine print, it could probably paint quite a scary picture. A loan is an advancement of money or something of value with the promise or a bargain struck between the parties involved to redeem the full sum with interest within a stipulated period of time.
Although banks are the most popular avenues from which to seek out a loan from there are also other lending establishments that function sole for the purpose of facilitating loan arrangements.
There are two very basic types of loans which are the secured one and the unsecured one. The secured ones are based on some kind of acceptable collateral being offered in place of the loan which may include anything of value such as property, stocks, bond and others, and the unsecured one doesn’t offer anything.
The basics of a business loan is very similar to that of other types of loans, which is the agreement struck between parties to lend a stipulated amount for a business where upon payment is returned with interest to the borrower over a fixed period of time.
These loans can be gotten from different sources of which banks are usually featured as the first choice as they generally do not own any part of the business and are just in the agreement to make money through the interest earned on the principal amount lent.
There are also equity investors, involving establishments or individuals who are willing to lend a sum of money in return for a vested interest in the business which usually comes in the form of shares in the said business.
In trying to minimize the possible occurrences of defaulting on payments, or not being able to make payments at the stipulated times and therefore incurring further interest on already outstanding amount one should consider consolidation the loans altogether. Make sure you also have a business plan in place. Learn how to prepare your business plan here.