Business loans can give you the money to expand your business or pay employees, as well as cover other expenses. Before you apply, be sure to understand how loans work and what documentation you’ll need to your lender. Also, be aware https://southbeachcapitaladvance.com/advance-capital-for-small-businesses of how long the process will take and any fees you could incur.

Common uses of business loans

A business loan can help pay for unexpected expenses, such as an office chair that is damaged or the COVID-19 pandemic. You may also need to borrow money to pay for an expense that is unavoidable for example, upgrading or replacing technology, purchasing machinery for manufacturing, or even remodeling the store. Some lenders offer credit lines that allow you to draw money in the event of need. The maximum amount is determined and the interest is only charged on the amount that is drawn.

The application process and eligibility requirements

You will have to provide complete information regarding your business, such as the official name of your company along with its tax ID and any financial records. This could include business plans, proposals, statements of profit and loss and the names and Social Security Numbers of those who own 20 to 25 percent or more of your business. Some lenders require that you have been in business at minimum for a year. Some lenders will consider startups, or do not have time limits.

A mentor or advisor can guide you through the process of getting a business loan. SCORE for instance, has a network of business mentors that provide free or low-cost assistance to startup founders and small businesses. Find a local chapter and talk to an advisor in person.