Small Businesses thrive on quick access to capital to utilize for expansion, to bridge gaps in cash flow, or as financing to cover unforeseen expenses. As a small business owner, it’s important that you understand your options and your resources.

The three most common types of Small Business loans are:

1. Unsecured Loan - This type of loan has no collateral and is a high risk to the lending bank. Clients who qualify for this type of loan generally already have a strong relationship with their bank and have an excellent credit rating, as defined by that bank’s credit policy.
2. Secured Loan - This type of loan is usually secured with some type of collateral. Examples of collateral include: home inventory, accounts receivable, CDs, securities, cars, trucks, insurance, land, and equipment.
3. Term Loan - These loans usually run for no more than 5 years and are used mostly for acquisition, capital expenditures, and refinancing short-term debt. Cosigners and guarantors can be used to provide additional support for the loan. Collateral must be pledged.

Applications requirements include: a Personal Financial Statement, Credit Report, Tax Returns and a Business Plan.

SBA, or Small Business Loans, are also available to qualifying businesses. An SBA Loan is a guarantee, much like the Federal Housing Administration Guarantees its loans...which means that all loans need to be made by a participating lender. First Midwest Bank offers SBA Guaranty Services to qualifying businesses.