Business loans can help you get the funds needed to https://southbeachcapitaladvance.com/how-do-student-credit-cards-work/ finance expansion as well as pay employees and cover other expenses. Before you apply, make sure you know how these loans work and what kind of documentation you’ll have to submit to your lender. Also, be aware of how long the application process can take and any fees you could incur.
Common uses for business loans
A business loan could help you pay for unexpected expenses, like an office chair that is damaged or the COVID-19 pandemic. You may also require borrowing funds to pay for an unavoidable capital expenditure, such as upgrading or replacing technology, purchasing equipment for manufacturing or remodeling a retail store. Some lenders provide credit lines that allow you to draw money in the event of need. The maximum amount is set and interest only accrues on the amount you draw.
Application process and eligibility requirements
To be eligible for a business loan, you will typically have to provide detailed information regarding your company, such as the official business name as well as tax ID numbers and financial documents. This could include business plans, proposals and profit and loss statements along with the names and Social Security numbers of those who are owners of 20 percent to 25 percent or more of your business. Some lenders require that you be in business for at least one year. Some lenders will consider startups, or do not have time requirements.
A mentor or advisor can help you navigate the process of getting a business loan. SCORE, for example, has an extensive network of business mentors who offer free or low-cost assistance to startup founders and small businesses. It is possible to search for an area-based chapter to meet with an advisor in person.
