Business loans can help you get the capital to expand your business or pay employees, as well as pay for other expenses. Before you apply, be sure you understand how these loans work and what type of documentation you’ll have to submit to your lender. Also, be aware of how long the application process will take and any charges you might incur.
Common uses for business loans
A business loan could help you pay for unexpected expenses, such as a damaged office chair or the COVID-19 pandemic. You might also need to borrow funds to finance an unavoidable investment such as upgrading or replacing technology, buying manufacturing equipment, or renovating a store. Some lenders provide credit lines that allow you to draw funds when needed. The maximum amount is fixed and interest is charged only on the amount drawn.
The application process and eligibility requirements
You’ll need to provide https://southbeachcapitaladvance.com detailed details regarding your business, such as the official name of your business and its tax ID number, and any financial documents. These could include business plans, proposals and statements of profits and losses and the names and Social Security numbers of those who control 20 percent to 25 percent or more of your business. Some lenders require you to have been in business for at minimum for a year. Some lenders will consider startups, or do not have time requirements.
A mentor or advisor can guide you through the business loan process. Organizations such as SCORE have a network of volunteers who act as business mentors that provide low- or no-cost advice to startups and small-sized businesses founders. You can locate a local chapter and meet an advisor in person.
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