Complete Guide to Business Loans
Everything you need to know about business loans, from types and requirements to application tips. Make an informed decision for your business funding needs.
Compare Business Loan Options
Traditional Term Loans
- Lower rates
- Predictable payments
- Builds credit
- Strict requirements
- Collateral needed
- Longer process
SBA Loans
- Low down payment
- Long terms
- Lower rates
- Lengthy process
- Lots of paperwork
- Strict requirements
Equipment Financing
- Quick approval
- Tax benefits
- Equipment as collateral
- Limited use
- May need down payment
- Depreciation risk
Business Line of Credit
- Flexible draws
- Pay for what you use
- Revolving credit
- Higher rates
- Regular renewals
- Lower limits
Understanding Business Loans
What is a Business Loan?
A business loan is a financial product that provides capital to businesses for various purposes, from expansion to working capital. Understanding the different types and their purposes is crucial for making the right choice.
Why Get a Business Loan?
- Fund business expansion
- Purchase inventory or equipment
- Manage cash flow gaps
- Hire new employees
- Refinance existing debt
- Take advantage of opportunities
Key Terms to Know
Qualification Requirements
Basic Requirements
Required Documentation
Business Documents
- Business licenses
- Formation documents
- EIN documentation
- Business plan
Financial Records
- Tax returns (2-3 years)
- Financial statements
- Bank statements
- Cash flow projections
Additional Items
- Collateral documentation
- Lease agreements
- Insurance policies
- Owner identification
Application Process
Before You Apply
Application Steps
Common Mistakes to Avoid
Frequently Asked Questions
How long does it take to get approved?
Approval times vary by loan type. Traditional bank loans may take 2-4 weeks, while online lenders can approve within days. SBA loans typically take 60-90 days.
What credit score do I need?
Minimum credit score requirements vary: Traditional bank loans (680+), SBA loans (640+), Online lenders (580+), Equipment financing (600+).
How much can I borrow?
Loan amounts depend on factors like revenue, credit score, and time in business. Ranges from $10,000 to $5 million are common.
What documents do I need?
Typically required: Business tax returns, personal tax returns, bank statements, financial statements, business licenses, and legal documents.