You may need financing as a business owner in order to boost cash flow, purchase new equipment or expand operations. With a business loan you borrow money and pay it back over time with interest. Based on the type of business loan you choose and your lender is, there may be different terms and requirements as well as whether or not it is secured and whether a personal guarantee is required. To maximize your chances of being approved, be sure to select a lender that considers your business’s financial strength and your own personal credit score and history.
Compare the total cost which includes the annual interest rate, fees, and penalties. It is also important to determine if the loan is secured, which typically requires a form of collateral, such as inventory, real estate or assets. Unsecured business loans, on the other hand, do not require collateral but are typically accompanied with higher interest rates.
All lenders will review your business and personal credit scores before approving you for an loan, and some will also consider your business plan and other documents as part of the application process. When applying for loans, it is essential to have the documentation ready to submit it quickly. This can why not try here include your personal and business tax returns as well as bank statements, and cash flow projections. Some lenders offer expedited processing for those who are eligible to borrow.