What You Need to Know About Business Loans
Business loans can help you get the funds to finance expansion as well as pay employees and cover other costs. Before applying, make sure you understand how loans work and what kind of documents you’ll need submit to your lender. Be aware of the amount of time it can take to submit an application as well as any fees you might be charged.
Common uses of business loans
A business loan can help you cover unexpected expenses, like a damaged office chair or the COVID-19 pandemic. You may also need to borrow money to cover an expense that is unavoidable like upgrading or replacing technology, buying machinery for manufacturing, or even remodeling the interior of a store. Some lenders offer lines of credit which allow you to borrow funds according to your needs with a maximum limit and interest only charged on the amount utilized.
Application requirements and eligibility requirements
To qualify for a business loan, you’ll need to provide detailed information about your company, which includes the name of your company, 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 are owners of 20% to 25% or more of your business. Some lenders require that you have been in business for at least one year. Some lenders will consider startups, or https://southbeachcapitaladvance.com do not have time requirements.
It is beneficial to have a guide or mentor to help you navigate the process of obtaining business loans. The organizations like SCORE have a network of volunteers who act as business mentors that provide free or low-cost assistance to small businesses and startup founders. You can find local chapters and meet an advisor in person.