Business loans can provide you with the funds needed to expand your business, pay employees, and cover other click for more costs. Before you apply, be sure you are aware of how loans work and what kind of documents you’ll need to submit to your lender. Be aware of the amount of time required to complete your application, as well as any fees to be charged.
Common uses of business loans
A business loan could help you cover unexpected expenses, like a damaged office chair, or the COVID-19 pandemic. You may also require borrowing funds to cover an unexpected capital expense, like upgrading or replacing technologies, purchasing manufacturing equipment or re-designing a retail shop. Some lenders offer credit lines that let you draw funding as needed and with a limit and interest charged only on the amount you use.
The application process and eligibility requirements
In order to be eligible for a loan, you’ll need to provide detailed information about your business, including the official name of the business as well as the tax ID number. financial documents. This may include business plans, proposals and statements of profits and losses, 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 you to be in business for at least one year. Others accept startups, or do not have any time limits.
It can be beneficial to have a mentor or advisor to help you navigate the business loan process. SCORE is a good example. It has a network of business mentors who provide free or low-cost assistance to entrepreneurs in the early stages and small businesses. You can find an area-based chapter to meet with an advisor in person.