As an owner of a business, you may need financing to boost cash flow, purchase new equipment or expand your operations. A business loan is a loan which you pay back over time, with interest. Based on the type of business loan you choose and your lender is, there may be different terms and conditions that include whether or not it is secured, and if a personal guarantee is required. If you’d like to increase your chances of being approved, apply with an organization that will look at your business’s financial stability as well as your personal credit score and past.
When comparing business loans, be sure to look at the total cost of the loan including the annual rate as well as any fees or penalties. You should also check whether the loan is secured. This typically requires some kind of collateral like inventory or real estate, or other assets. Unsecured business loans however don’t require collateral but usually come with higher interest rates.
All lenders will check your personal and business credit score before approving any loan. They may also consider your business plan, as well as other documents during the application process. When you apply for a loan, it’s important to have the documentation ready to submit it swiftly. This could include personal and business tax returns, bank statements and cash flow projections. Some lenders will expedite processing for those who are eligible to borrow.