What You Need to Know About Business Loans
Business loans can provide the money you need to purchase inventory or https://southbeachcapitaladvance.com/credit-cards-vs-merchant-cash-advances equipment, finance business expansion, pay employees and cover other costs. Before you apply, make sure you understand how these loans work and what type of documents you’ll need to submit to your lender. Be aware of how long the application process could take and the fees you could incur.
Common uses for business loans
A business loan may help you pay for unexpected expenses like a damaged chair at work or the COVID-19 pandemic. There may be times when you need to borrow money to pay for the cost of an investment that is not necessary for example, upgrading or replacing technology, buying machinery for manufacturing, or even remodeling a store. Some lenders offer credit lines that allow you to draw money according to your needs, with a set maximum and interest only charged on the amount used.
Application requirements and eligibility requirements
In order to be eligible for a loan, you’ll typically need to provide detailed information about your company, including the name of your company as well as tax ID numbers and financial documents. This could include business plans, proposals, statements of profit and loss and the names and Social Security Numbers of those who own 20-25 percent or more of the company. Some lenders require that you’ve been in business for a minimum of one year, while some will accept startups, or do not have any time-in-business requirements.
A mentor or advisor can assist you in the process of getting a business loan. Organizations like SCORE have an extensive network of business mentors who provide low- or no-cost advice for startups and small business founders. You can locate a local chapter and talk to an advisor in person.
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