Business loans can help you get the capital to expand your business, pay employees, and pay for other expenses. Before applying, make sure you understand how these loans work and what documents you’ll need to your lender. Be aware of the time required to complete your application, as well as any fees that might be due.
Common uses for business loans
A business loan can assist you in paying for unexpected expenses, such as an injured chair at work or the COVID-19 pandemic. Alternatively, you might require borrowing money to cover an unavoidable capital expenditure, for example, replacing or upgrading technology, purchasing manufacturing equipment or re-designing a retail shop. Some lenders offer lines of credit that let you draw funding whenever you need it and with a limit and interest only charged on the amount used.
Application process and eligibility requirements
You will need to provide detailed details about your business, such as the official name of your business and its tax ID number and any financial documents. This could include business plans or proposals, as well as profits and loss statements, and the names and Social Security Numbers of those who hold 20-25 percent or https://southbeachcapitaladvance.com/credit-cards-vs-merchant-cash-advance more of the company. Some lenders require that you have been in business for a minimum of one year, while others allow startups and don’t have any time-in-business requirements.
A mentor or advisor can help you navigate the process of getting a business loan. SCORE is a good example. It has an extensive network of business mentors that provide free or low-cost advice to founders of startups and small companies. You can locate a local chapter and meet an advisor in person.