There are many people who do not have ready cash in hand. But they want to make it big in the financial market. For them there are different financing agencies who offer a wide range of no cost loan options. These financing agencies may be corporate banks, commercial banks, mutual banks and mortgage companies.
Each of these no cost loan options has their distinct specialties. One aspect of one loan method may or may not be beneficial for your business. Some of these no cost loan programs are more industry oriented.
This means your business may not have the criteria required for the no cost loan you are applying for. This is where we should take the professional advice. They determine the type of no cost loan which will be most appropriate for your work.
They also work towards achieving the goal of acquiring the loan. They have a very wide network of lending institutions. Many of them have very flexible criteria for the borrowers. In other words, even if you have some problems with your last loan still you can get a no cost loan after working out a solution with them.
Different type of financing companies offers different type of loans. For example: Acquisition & Equity financing: When a company wants to purchase another company or desire for a merger then acquisition loan can be obtained.
This no cost loan can be partial that is the left over money required to complete the transaction. The merger or acquisition can also be fully financed. This no cost loan type requires creative loan structures which may be required to fulfill the collateral needed in order to acquire the loan and it totally depends on individual situations.
Companies going for venture capital or developers opting for gap funding go for Equity financing. Whenever there is a void gap between existing debt and required debt which allows the company to obtain 100% financing for a project Equity financing is used to fill it up.
Accounts Receivable – Factoring: Some medical related companies such as hospitals, urgent care facilities, long term care facilities etc. which require consistent cash flow can aptly go for this type of finance programs. Some other commercial related companies such as manufactures, janitorial services, staffing agencies, consultants which provide businesses to other businesses houses can also opt for this no cost loan program. These programs are highly flexible.
Asset Based Loans: These loans are secured by real estate and are short to mid term (1-5 years). Inventory, stocks, equipment, and other assets can also be used to secure such loans. The rates of this type of loans differ according the circumstances. Companies mostly opt for this loan when bank rejects a former loan request due to less creditable scores of the companies as they already have one or other financing currently in place.
Bridge & Mezzanine Loans: These are short term loans. There is always a time gap between the date of starting a project and getting the traditional financing. This time gap is filled up with these types of no cost loans. These loans are secured via stock within the company.
Hard Money Loans: These types of loan are required by the companies involved in construction projects but are unable to secure the no cost loan amount needed with their asset base. These are short term no cost loans and have a medium to high interest rate. It often requires personal guarantees.
Personal loans: If you have good credit and can show ability to repay a loan you may qualify for a personal loan or signature loan, these types of loans may be more expensive because of the higher risk of default. The advantage of this type of loan is most banks can process the paperwork in one day so if you are in need of cash fast this may be your best option.
PO & Inventory Financing: These types of loans are very expensive. These are obtained mostly by companies who already have a factoring program running or have built up a secure connection with a finance company. These are particularly best for companies which have a very high profit margin. The interest rates are often very high.
SBA Loans: These loans are backed up by the government for minority, women, and startup programs. This loan is also appropriate for small businesses that are running for at least two years.
These are the different types of loans an individual or a business can get to fulfill their project needs.