Business loans can provide the money you need to purchase inventory or equipment for business expansion, finance business expansion pay employees and cover other costs. Before you apply, be certain to know how these loans operate and what paperwork you’ll need to submit to your lender. Be aware of the amount of time required to complete an application and any https://southbeachcapitaladvance.com/credit-card-debt-and-capital-shortages-by-board-room fees due.
Common uses of business loans
A business loan may help you pay for unexpected expenses like an injured chair at work or the COVID-19 Pandemic. In addition, you may need to borrow funds to cover an unavoidable capital expenditure, like replacing or upgrading technology, purchasing manufacturing equipment or renovating a retail store. Some lenders offer credit lines that permit you to draw money in the event of need. The maximum amount is set and interest only accrues on the amount drawn.
Application process and eligibility requirements
To be eligible for a commercial loan, you’ll typically need to provide complete information about your company, including the official name of the business as well as tax ID numbers and financial documents. This could include business plans including proposals, statements of profits and losses, as well as the names and Social Security Numbers of those who own 20-25 percent or more of your company. Some lenders require that you’ve been in business for at least one year, whereas others allow startups and do not have any time-in-business requirements.
It is beneficial to get a mentor or an adviser to help you navigate the business loan process. Organizations like SCORE have a network of volunteers who act as business mentors who offer free or minimally-cost guidance to small businesses and startup founders. You can find a local chapter and talk to an advisor in person.