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An online small business loan in Oak-Park-Financial is a typical form of credit in the commercial sector. Comparable to loans in the private customer area, banks offer their business customers business loans in different loan variants. The provision of collateral is a prerequisite for issuing a business loan. In contrast to personal loans, it is very difficult to obtain a business loan without collateral. The following types of credit are typically used for business loans:
A current account credit – often referred to as a working capital loan – is the commercial counterpart to a classic overdraft facility for private customers. In contrast to the overdraft facility for private investors, however, security is usually required from a company for a current account facility.
An investment loan is a business loan that, as the name suggests, can be used to finance investments (e.g. machinery, buildings or other capital goods) in the long term. Similar to the current account credit, which is used more for short-term liquidity bridging, the provision of an investment loan requires the provision of collateral (e.g. the property itself in which one invests or by placing a mortgage).
Many know to factor as a purchase of receivables, but strictly speaking, it is also a loan option. The “factor” (the person who buys an invoice) grants the seller (ie the company) a business credit by purchasing the claim. Even though factoring has long been used as a pure bridging of liquidity, this form of credit has now established itself as a very profitable form of receivables management for companies.
Strictly speaking, a guarantee is not a real business loan, but a contingent liability at a bank. This form of credit is often used by banks to finance a deposit for the rented property (e.g. rented office, workshop, etc.). Technically, the bank issues a guarantee according to the same process as a loan; a normal credit check is carried out.