Running a business is hard work. There are countless things that can affect one’s finances. Whether you’re experiencing a slow period or scaling your trades, cash is crucial to keeping things running smoothly. At Associates Home Loans we offer business loan options to help business owners realize their potential.
Who Can Apply For A Business Loan?
Business loans are for businesses only. Most businesses can apply for a business loan as long as they can provide the necessary documentation and choose the right business loan for their goals. If you’re not sure if you’re eligible for a business loan, feel free to call us at 813-774-4285.
What can you use a business loan for?
Business loans are expected to be used to help grow a business. Funds can be used for equipment, working capital, real estate acquisition and more, depending on the type of business loan you receive and your loan agreement.
Can Business Loans Be Used For Personal Purposes?
Business loans have strict requirements regarding their use. While some may be used for payroll and others for real estate, by themselves, business loans should not be used to pay for personal purchases or to cover personal debt such as a mortgage payment.
What Information Do You Need To Apply For A Business Loan?
When you apply for a business loan, two types of information may be relevant: business finances (including financial forecasts) and personal finances. The amount and documents needed will depend on the type of business you run and who makes the loans.
For example, if you run a consulting business as a sole proprietor, you may need to provide information about your business’s income, expenses, assets, and debts, as well as your own personal finances.
If you are the CFO of a corporation, the personal information needed for a business loan application may be limited to only the biographical information of the major players in the company, which can usually be found in a business plan.
In addition to financial information, you may also need to provide collateral for a loan to help secure it.
What Can Be Used As Collateral For A Business Loan?
If you are required to post collateral on your loan, you can choose from a variety of business assets, including equipment, buildings, vehicles, inventory, and your accounts receivable. Which ones can be used may depend on your appraised value and your lender’s requirements.
Can A Business Loan Be Used To Start A Business?
Business loans are often not the best loan to start a business, especially for a new business owner. To receive a business loan, you are often required to show business financial information, including forecasts. However, traditional lenders are reluctant to back new businesses, preferring to lend to people who have already demonstrated that they are investing in your business.
How Much Can I Borrow With A Business Loan?
The amount you can borrow will depend on your business’s unique financial position and goals.
Loan amounts can vary based on the type of loan, the purpose of the loan (purchase property, working capital, etc.), the valuation of your business, the value of your collateral, and other factors. For example, a commercial real estate loan is likely to be larger than a short-term commercial loan.
When Should I Pay A Business Loan?
The term of your business loan will be determined by the lender. Traditional business loans require a repayment of 1-5 years, while short-term loans require a repayment of 3-18 months.
Popular because they are partially backed by the government, SBA loans have longer terms, up to 25 years.
If you’re hoping to get an equipment loan, you can expect a repayment term of between 1 and 5 years. Commercial real estate loans, on the other hand, have payment terms more similar to regular mortgages, around 20 to 25 years.
Is a Business Line of Credit a Type of Loan?
Having access to working capital can be crucial in maintaining operations during slower periods, ramping up production for key sales months, and fueling business growth. A business line of credit can help support businesses that find themselves short of cash.
A business line of credit is a special type of loan where you have access to working capital and only have to pay back what you use. Essentially, it can be used like a bank account as long as what you pay back is within the terms of your loan.
Can I Get A Government Business Loan?
SBA (Small Business Administration) loans are very popular, but there is some confusion surrounding them.
The United States government does not provide loans to businesses.
Rather, the SBA guarantees loans to eligible businesses. Businesses interested in obtaining an SBA loan must find an SBA-approved lender. Because the SBA guarantees up to 85% of an SBA loan, there may be more restrictions on this type of loan. Also, more paperwork may be required.
What Kind Of Rate Can I Expect?
As with all loans and loan details, the rate you can expect on a business loan will depend on your unique financial position. Business loans can vary greatly depending on the type of loan you want. Some loans may start with a low rate of 5%, while others have a rate of around 30%. To find out what rate you can be given, apply now!
Do you need Business Financing? Apply Now!
At Associates Home Loans, we don’t just help homeowners. We are also committed to helping business owners in their efforts to scale their operations. If you are facing financial obstacles that are limiting the growth of your business, contact us today. We can help you determine what type of business loan may be appropriate for your business. While we hope this information has been helpful, the best way to learn about business loans and determine which one may work best for your business is to speak with our business loan professionals.
