There are a few different types of business loans available for freelancers and entrepreneurs. The most common types of business funding are term loans, secured loans, SBA loans, and business lines of credit.

A term loan is when a lender provides you with an upfront lump sum of cash, which you agree to repay at a set interest rate over a specific period of time.

A secured loan is similar to a term loan. The main difference is that to qualify for a secured loan, you will need to offer your lender some form of collateral, such as a portion of your business revenue or a personal asset like a car. If you default on your loan, your lender can obtain your collateral to cover their financial loss. Use the loan calculator above and make sure you’re able to make the monthly payments before signing up for a secured loan, so that you don’t lose your collateral.

Available in the U.S., an SBA loan is partially backed by the Small Business Administration, a government group that focuses on helping small businesses grow. The SBA partners with lenders across the country to help small business owners access loans at affordable rates. SBA loans can offer lower down payments, more flexible qualification requirements, and access to counselling as you continue growing your business. You can learn more from the SBA.

Although technically not a loan, a business line of credit can also be used as a source of cash flow for small business owners. With a line of credit, you can access funds up to a certain credit limit determined by your lender. You pay back any money you’ve withdrawn on a monthly basis, and you only pay interest on the money you’ve withdrawn.

If you’re looking for options to make day-to-day business purchases, a Wave Money bank account might be a solution for you. With Wave Money, there are no monthly fees, account minimums, or transfer fees. In addition, any purchases you make with your Visa® business debit card from Wave will automatically sync with Wave Accounting, allowing you to manage your business purchases and bookkeeping much easier when tax season approaches.

There are two key types of lenders available for freelancers and entrepreneurs. Here’s a brief overview:
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• Banks: If you’re looking for a term loan or a business line of credit, a bank may be your best place to start. You can work with an advisor in-person or start the application process online to find out what type of loan you can qualify for. Banks will often look at your personal credit history when approving you for a loan. If you already have a personal account with the bank that’s in good standing, you might have an easier time getting approved for funds.
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• Online lenders: If you’re hesitant about working with a bank, there are online lenders available across North America that can provide you with access to loans and lines of credit. Many online lenders allow you to complete your entire application online, followed by a phone call with a representative to review your information and discuss details. Applying online can be quicker than working with traditional lenders, but because some of these lenders don’t require credit checks, they may offer much higher interest rates on their loans. Make sure you’re able to afford monthly payments before signing up for a high-interest loan.

Here are the different items you need ready in order to qualify for a business loan:
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• Business plan: Have a detailed business plan ready to show lenders why you need to borrow money, how your business will make money, and how you will pay the loan back
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• Business information and documents: You should have other business documents ready, including business licenses, ownership documents, and tax documents
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• Cash flow statements: Cash flow projections, balance sheets, income statements, and other financial statements can help show lenders that you can make loan repayments on time
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• Credit score: You should aim to have a credit score of at least 680 to qualify for a business loan from a traditional lender, like a bank; some online lenders offer loans without credit checks but at a noticeably higher interest rate
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• Personal resume: Have your resume ready to show lenders your experience in your industry and your history working with reputable organizations
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• Personal documents: You’ll need to have a social security number to share with lenders, along with personal bank statements and your debt-to-credit ratio