Business loans can help you get the money you need to purchase equipment or inventory, finance business expansion as well as pay employees and pay other expenses. Before applying, make sure you understand how these loans work and what documents you’ll need to your lender. Be aware of the time required to complete your application and any fees that might be due.
Common uses for business loans
A business loan can be used to pay for unexpected expenses, such as a damaged office chair, or the COVID-19 pandemic. It is also possible to borrow money to cover an unavoidable investment like upgrading or replacing technology, buying manufacturing equipment, or transforming your store. Some lenders offer https://southbeachcapitaladvance.com/credit-cards-vs-merchant-cash-advance/ credit lines that allow you to draw funds according to the need. The maximum amount is set and the interest is only charged on the amount you draw.
Eligibility requirements and application process
To be eligible for a commercial loan, you’ll need to provide detailed information regarding your company, such as the name of your company as well as tax ID numbers and financial documents. This 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 percent or more of your company. Some lenders require that you have been in business for at minimum for a year. Some lenders will consider startups, or do not have deadlines.
A mentor or advisor can assist you in the business loan process. SCORE for instance, has a network of business mentors who offer free or low-cost assistance to entrepreneurs in the early stages and small businesses. You can search for local chapters and meet with an advisor in person.