 TITLE: What Is the Difference Between a Grant and a Business Loan? CONTENT: What Is a Business Loan?\n------------------------\nBusiness loans are money you borrow that must be paid back. There are short-term business loans (generally six to 24 months) or long-term loans (usually three years or longer). While grants are intended to achieve a mission, bank loans are intended to make money for the lender. Therefore, a lender's primary concern is whether you'll be able to repay the loan, usually with interest. Many loans are reserved for companies that have been in business for at least a year or two and have a solid business foundation. Because new businesses are riskier investments for lenders, loans to start a business are harder to find.\nYou can get business loans from banks, credit unions, nonprofit organizations and online lenders. Online lenders focus on smaller, short-term loans and usually have less stringent lending criteria than traditional lenders. For example, they often lend to newer businesses or those with lower credit scores. You typically complete an application online; if approved, loans may fund in a matter of hours. However, online lenders generally charge higher interest rates than traditional lenders.\nFor business loans of $350,000 or more, or for long-term loans, a traditional lender such as a bank or credit union is usually your best bet. These lenders generally require a business plan, financial statements, income tax records and other documentation. They want you to prove that your business is profitable and explain how you'll use the loan to make it even more profitable.\nDepending on how long you've been in business, lenders may consider your business credit, personal credit or both when assessing your business loan application. Check your business credit report, personal credit report and personal credit score before you begin looking for loans. Make sure your credit reports are accurate and take steps to improve your credit score if necessary. Compare offerings from several different lenders, including the annual percentage rate (APR), loan amounts available, loan terms and fees, to find the best options before you apply. END