Business loans are commonly used by business owners to access cash needed for business start up, growth or improvement. There are a wide variety of programs and lenders available, so it's important to understand your specific needs and pursue a loan that fits your situation.
What Is A Business Loan?
A business loan is a financial tool available to business owners of all sizes who need funding to enhance their business. Small businesses and start-up businesses typically have a more difficult time securing a business loan, but it is certainly not impossible. Regardless of your business size, any lender you work with will want to see firm documentation that supports the viability of the business as well as the purpose for the loan.
What Can I Use It For?
Business loans can be used for many things. Some common uses include start up costs, expansion of the business, capital investments, and refinancing of business debt. Most business owners will pursue a business loan at some point because it is common to need additional funds at various stages of business development.
What Documentation Will I Need To Apply For A Business Loan?
Specific documentation will vary somewhat from lender to lender, but there are a few common things that you will be asked to provide:
A complete business plan, including an overview of the market and customer base for your business
Personal and business financial statements
Collateral to secure the loan
Incorporation or LLC documents (if applicable)
Proof of ownership or sale if the business was purchased by you
Tax returns and credit references
Material contracts (if applicable)
These are the basic items you will need, but remember that each lender will probably have other information they will want you to provide.
Are There Different Types Of Business Loans?
Yes, there are many types of business loans and the choices can sometimes be confusing. Examples include small business specific programs, industry specific loans, "micro" loans for small dollar amounts, community development loans, and many others. Whatever your business need, there is most likely a business loan for you offered somewhere.