Business loans can provide you with the capital you need to purchase inventory or equipment, finance business expansion or pay employees, and also cover other expenses. Before applying, make sure you know how these loans work and what type of documentation you’ll have to submit to your lender. Also, be aware of how long the process can take and any charges you might incur.
Common uses for business loans
A business loan may aid in the payment of unexpected expenses, such as the damage to your workplace chair or the COVID-19 Pandemic. Alternatively, you might require borrowing money to cover an unexpected capital expenditure, like replacing or upgrading technology, purchasing equipment for manufacturing or renovating a store. Some lenders provide credit lines that allow you to draw funds as needed. The maximum amount is set and interest is charged only on the amount drained.
Eligibility requirements and application process
You’ll be required to provide specific information about your company including the official name of your company and its tax ID number and any financial records. These could include business plans, proposals and statements of profit and loss and the names and Social Security numbers of those who control 20% to 25 percent or more of your company. Some lenders require that you have been in business for at least one year, while some are open to startups or do not have any time-in business requirements.
It can be beneficial https://southbeachcapitaladvance.com/dri-avast-software-refund-process/ to have a mentor or adviser to help you navigate the process of getting a business loan. Organizations such as SCORE have a network of volunteers who act as business mentors that provide free or low-cost advice to small businesses and startup founders. You can search for a local chapter to connect with an advisor in person.
