Team photo
Centuria Financial Group

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David P. McCabe,

WMCP®, ChFC®, CLU®

Financial Planner, Prudential Advisors

david.mccabe@prudential.com

 

Jason M. Bowers,

RICP®, CDFA®

Financial Planner, Prudential Advisors

jason.bowers@prudential.com

 

Nathaniel D. High, RICP®

Financial Planner, Prudential Advisors

nathaniel.high@prudential.com

 

Nicholas Over

Financial Planner, Prudential Advisors

nicholas.over@prudential.com

 

Melissa L. Lang

Client Relations Manager, Prudential Advisors

melissa.lang@prudential.com

 

Centuria Financial Group

2333 Baltimore Blvd Suite B

Finksburg, MD 21048

 

Phone:  443-952-7232

May/June 2022

Understanding Small Business Loans

Understanding Small Business Loans

Having significant debt is never a good business model. However, seeking funding to make your business more profitable may be a smart move. Start the process by reviewing your financing options.

Debt Financing
Loans from a financial institution are a common method of business financing. The lender assigns the loan terms, including the loan duration, monthly payments, and interest rate. Lenders have no control over your business decisions, and the loan interest is tax deductible as a business expense. If you’re taking on debt, make sure you have sufficient capital coming into your business to meet all monthly expenses.


Equity Financing
Equity financing comes from an individual or firm that invests in your business. You won’t have monthly payments and won’t have to pay back the funds, potentially leaving you with more cash on hand to grow your business. With equity financing, though, you’re giving up some percentage of ownership to the investor(s)—sometimes 50% or more. Unless you have an option to buy out an investor’s stake, the investor will continue to earn a percentage of your profits indefinitely.


SBA-Guaranteed Loans
The Small Business Administration partners with lenders to offer guaranteed loans for most business purposes, including real estate, construction, equipment and asset purchases, business acquisition, debt refinancing, etc. Eligibility depends on the lender, but businesses that are unable to get financing elsewhere may qualify for SBA loans.


Lines of Credit
Lines of credit provide access to funds as your business needs them, up to your account’s credit limit. They typically have a variable interest rate, and monthly payments are based on the amount borrowed. They’re appropriate for managing short-term cash needs and may be particularly useful for businesses with seasonable sales.


Business Credit Cards
A credit card can help with buying items your business uses every day. Look for a card that offers cash back on purchases. Cards often have high interest rates and low credit limits, so pay off any balance when the bill comes.


Friends and Family
Loans from relatives or friends may be another option. Present your business plan and draw up a repayment schedule.

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Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Centuria Financial Group is not affiliated with Prudential Financial. Centuria Financial Group sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Centuria Financial Group is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Centuria Financial Group and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Prudential Advisors is a brand name of The Prudential Insurance Company of America and its subsidiaries. Melissa L. Lang is employed by David McCabe and not The Prudential Insurance Company of America or its subsidiaries.
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