Expansion Loan Basics for Small Business Owners
You never want to miss out on expanding when the time is right for your business. Market shifts can put you in a prime position to increase your share, but you may not have the capital on hand to cover the costs of growing. An expansion loan can be exactly what you need to kick things off. Here are some essential facts to know about expansion loans.
Easier To Get Than Startup Loans
No one enjoys going through the loan process. If you attempted to get a startup loan, you remember how much of a pain it was. History and background are significant factors for loan approval. When you’re new, you are a more considerable risk and less attractive to lenders.
Once you’re established and looking to grow, getting a loan is typically much easier to accomplish. As long as you can demonstrate a solid business plan and have a good track record so far, your odds of getting an expansion loan are pretty good.
Different Types of Loan Providers
Various institutions can help you get the loan you need. Do your research to determine which option accommodates you best. Here are a few to think about.
Credit unions: Credit unions are known for their low rates and fees. They typically have a more personal touch than larger banks and lending institutions. Since they tend to be small and local, they may not have as many offers for business loans.
Traditional banks: Banks compete to do business with quality borrowers. If you have a good relationship with your bank and sound credit history, you can find terms that suit your needs.
Online lending institutions: This can be a great way to get cash fast. Online lenders usual are the quickest option and put you through less scrutiny. The downside is you are likely to face higher rates and larger fees.
Items You Need for the Loan Application Process
Make sure you come prepared to apply for your loan. Collect financial statements, your business credit report, and tax returns. A lender will want to see a viable business plan as well as legal documents that verify your stake and responsibilities in the business. Collateral may be required to secure the loan, so decide what you will offer.
Do thorough research to figure out how much you need for a loan and where you should go for one. Consider your numbers carefully. Then you can use an expansion loan to help your business excel.