SME business loans provide small and medium businesses with funds for varied uses like purchase of raw materials, repair or purchase of machinery and equipment, financing of new business projects, etc. 

There are several SME business loans, and choosing the wrong small business loan can prove to be a harmful business decision. You may end up waiting for months to get the loan amount that means you are not able to get the requisite funds when needed. 

It is crucial to know the different SME loans available to businesses to choose the best possible loan option. 

Additionally, you can find out about business loan eligibility from the websites of various lenders before applying for a loan. 

Types of Business Loans for SME Businesses

1. Term loans: Term loans are lump sum loans in which the customer gets a lump sum loan amount that he has to pay back in monthly installments along with the applicable interest charges.
2. SBA loans: Small Business Administration loans are low-interest government-backed loans that offer you funds at low costs. However, the processing time for these loans is long and you may have to wait for months to get the money. 
3. Business lines of credit: Business lines of credit are similar to credit cards and offer a revolving line of credit. You can use the maximum credit limit, repay it, and then take more credit similar to a credit card. You need to pay interest only on the amount of money you withdraw and not the entire available amount. 
4. Equipment loans: If you need to purchase expensive machinery, vehicles, equipment, etc., for your business, you can opt for an equipment loan in which the equipment acts as collateral. 

You can choose the SME loan of your choice based on the credit you require and the time within which you need the money.

Also Read: Why MSME is an Ideal & New Approach for Start-up Businesses