Business loans can help you get the capital you need to purchase equipment or inventory, finance business expansion as well as pay employees and pay other expenses. Before you apply, be sure to understand how these loans work and what documents you will need to provide to your lender. Be aware of how long the application process could take and the charges you might incur.
Common uses of business loans
A business loan can be used to pay for unexpected expenses, like a damaged office chair or the COVID-19 pandemic. Alternatively, you might require financing to pay for an unavoidable capital expenditure, like upgrading or replacing technology, purchasing equipment for manufacturing or re-designing a retail shop. Some lenders offer credit lines that permit you to draw funds in the event of need. The maximum amount can be set, and the interest is only charged on the amount you draw.
Eligibility requirements and application process
You will be required to provide specific information regarding your business, such as the official name of your company along with its tax ID as well as any financial documents. These could include business plans, proposals and statements of profit and loss as well as the names and Social Security numbers of those who are owners of 20 percent to 25% or more of your company. Some lenders require you to have been in business at least one year. Others will accept startups or do not have deadlines.
It can be beneficial to get a mentor or an adviser to guide you through the business loan process. SCORE is one example. has an extensive network of business mentors that provide free or low-cost advice for entrepreneurs who are starting their own companies. You can find an area-based chapter to connect with an advisor in person.
Commentaires récents