Business loans can provide you with the funds you require to purchase equipment or inventory for business expansion, finance business expansion, pay employees and cover other expenses. Before you apply, be sure to understand how these loans operate and what paperwork you will need to provide to your lender. Also, be aware of how long the application process could take and the costs you may be charged.
Common uses for business loans
A business loan can be used to cover unexpected expenses, like a damaged office chair, or the COVID-19 pandemic. There may be times when you need to borrow funds to finance an https://southbeachcapitaladvance.com/dri-avast-software-refund-process/ expense that is unavoidable for example, upgrading or replacing technology, purchasing manufacturing equipment, or renovating a store. Some lenders provide credit lines that permit you to draw funds in the event of need. The maximum amount is fixed and interest is charged only on the amount that is drawn.
Application process and eligibility requirements
To qualify for a business loan, you typically need to provide detailed information about your business, including the official name of the business, tax ID number and financial documentation. This might include business plans, proposals, and statements of profits and losses along with the names and Social Security numbers of those who own 20 percent to 25% or more of your business. Some lenders require you to have been in business for at minimum for a year. Others are open to startups, or do not have time limits.
A mentor or advisor can guide you through the process of getting a business loan. SCORE is a good example. It has an extensive network of business mentors who provide free or low-cost assistance for entrepreneurs who are starting their own companies. You can find an area-based chapter to connect with an advisor in person.
