Business loans can provide the funds you require to purchase inventory or equipment for business expansion, finance business expansion or pay employees, and also cover other costs. Before you apply, make sure you know how these loans work and what kind of documents you’ll need to submit to your lender. Be aware of the length of time it can take to complete an application and any fees that might be due.
A business loan could aid in the payment of unexpected expenses such as the damage to your workplace chair or the COVID-19 Pandemic. Alternatively, you might require financing to pay for an unavoidable capital expenditure, such as replacing or upgrading technology, buying manufacturing equipment or remodeling a retail store. Some lenders offer credit lines which allow you to borrow funds according to your needs with a maximum limit and interest only charged on the amount that is used.
You will have to provide complete information about your company including the official name of your business, its tax ID number, and any financial documents. This may include business plans, proposals, and statements of profit and loss as well as the names and Social Security numbers of those who own 20% to 25 percent or more of your company. Some lenders require that you have been in business for at least one year, while other lenders will accept startups, or do not have any time-in-business requirements.
A mentor or advisor can help you navigate the process of getting a business loan. Organisations like SCORE have an extensive network of business mentors who provide free or low-cost advice for startups and small business founders. Find an area chapter and meet an advisor in person.