Business loans can help you get the funds to expand your business to pay employees and cover other costs. Before you apply, make sure you https://southbeachcapitaladvance.com/advance-capital-for-small-businesses/ understand how these loans work and what kind of documents you’ll need to provide to your lender. Also, be aware of how long the application process can take and any charges you might incur.

Common uses of business loans

A business loan can help you 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 expense for example, upgrading or replacing technology, purchasing machinery for manufacturing, or even remodeling the interior of a store. Some lenders offer credit lines that allow you to draw funds as needed. The maximum amount is set and the interest is only charged on the amount drawn.

Eligibility requirements and application process

You’ll need to provide detailed details regarding your business, such as the official name of your company and its tax ID number as well as any financial documents. This might include business plans, proposals, and profits and loss statements, as well as the names and Social Security numbers of those who control 20% to 25 percent or more of your business. Some lenders require that you have been in business at least one year. Others are open to startups, or do not have time requirements.

It can be beneficial to have a mentor or adviser to guide you through the business loan process. Organizations such as SCORE have an extensive network of business mentors that provide free or minimally-cost guidance to startups and small-sized businesses founders. It is possible to search for local chapters to meet with an advisor in person.