WhatYouNeedtoKnow AboutBusinessLoans
Did you know?
Aside from funding the initial costs of a startup, loans can also be used for business expansion or relocation
What are the different types of loans?
Secured business loans
It is supported by collateral (may be a property or business asset pledge as 'security' for the loan)
The lender can seize your collateral if you fail to pay the loan
Unsecured business loans
It is usually lowranking in terms of priority
It poses a greater risk for lenders so it attracts higher interest rates
Borrowers may be asked to get a guarantor if they do not have assets to pledge as security
Whenchoosingaloan,it'simportanttocheckthecost, interestrates,hiddenfees,termsoftheloan,etc
Whatdocuments youneedtoapplyforabusinessloan
Financialstatements
These best demonstrate your ability to repay the loan and its interest Lenders will usually require to see at least two (2) years' worth of financial history.
Guaranteee
When taking out an unsecured business loan, you may be asked to get a guarantor or guarantee to make sure someone will step in and repay your debt when you can't
Loanagreement
Usually, lending institutions have their standard loan agreement Get a lawyer to review the document before signing so you know what exactly you're agreeing to.
Businessplans
A well-constructed and formalised business plan can make a huge difference when getting external funding
Business loans are not one-size-fits-all The best loan for you will depend on how much money you need, when you need it, and why you need it