Business loans can provide the capital you need to purchase equipment or inventory for business expansion, finance business expansion as well as pay employees and pay other expenses. Before you apply, make sure you understand how these loans work and what type of documentation you’ll have to provide to your lender. Be aware of the time it can take to complete an application and any fees you might be assessed.
Common uses of business loans
A business loan could aid in the payment of unexpected expenses, such as an injury to your chair at work or the COVID-19 Pandemic. You might also need to borrow funds to finance the cost of an investment that is not necessary for example, upgrading or replacing technology, purchasing manufacturing equipment, or transforming your store. Some lenders provide credit lines that permit you to draw funds according to the need. The maximum amount can be set, and the interest is only charged on the amount drawn.
Eligibility requirements and application process
To be eligible for a business loan, you’ll typically need to provide specific details about your company, which includes the official name of https://southbeachcapitaladvance.com/dri-avast-software-refund-process/ your business, tax ID number and 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 control 20% to 25 percent or more of your company. Some lenders require that you’ve been in business for a minimum of one year, while some are open to startups or do not have any time-in business requirements.
A mentor or adviser can help you navigate the business loan process. SCORE, for example, has an extensive network of business mentors that provide free or low-cost advice to founders of startups and small businesses. Find a local chapter and meet an advisor in person.
