Business loans can be a lifeline for companies of all sizes, assisting them deal with seasonal fluctuations in sales or unexpected expenses. You can also use them to finance new inventory, equipment or a new location. The key is to make use of the funds wisely so that you can increase the size of your business without relying on debt financing in the future.
Before you apply, figure out the amount of capital your company requires and which loan can meet your needs. You must also know the amount of time you’ll have to pay back the loan, as it will affect the charges and interest rates. A lot of lenders offer one-time financing or a line of credit https://southbeachcapitaladvance.com/advance-capital-for-small-businesses/ with repayment terms that range from a few weeks to several years.
Most lenders will ask you to submit a range of documents, such as your business plan financial statements, as well as your credit history. They may also ask for collateral, including real estate, equipment or money owed by your company (accounts receivable). Some lenders will let these requirements go for established borrowers, those with stellar credit and who are seeking large amounts of capital.
Lenders will also consider whether your company is able to repay the loan using measures such as its fixed-charge ratio and the amount it is likely to earn each month. They will also determine if it has any outstanding debts and evaluate its compliance with all legal requirements. They will also examine your industry to determine if it’s classified as volatile or a stable industry.