Business structures and forming your business
Understand the differences between a Sole Proprietorship, Limited Partnership, Limited Liability Partnership, Limited Liability Company, S Corporation and Corporation.
You’ve moved your startup from a dream on paper to an office. Now you need money to pay suppliers, market your products or services, and pay the staff. Alternatively, perhaps you are an established business ready to expand with new equipment or into new locations. It might be time for a business loan.
Reasons for getting a loan
Multinational corporations, mid-size manufacturers and small service providers all routinely apply for bank loans. Every company in business needs working capital.
The most common reasons for applying for a business loan include:
What You’ll Need
Bank loans typically require extensive paperwork. Check with your accountant to make sure all your business financial reports are ready for the loan officer’s review.
At the least, a small business applying for a loan will likely need:
You should accompany these documents with the story of your business, as a way to tie it all together, and present your best possible profile to the loan officer. Talk about industry growth, your chance to partner with a major player in the field, or other reasons you are seeking the loan.
The loan application package, which will also include all the required paperwork, should be filled out. If you have questions, ask the loan officer. Don’t turn it in only partially completed.
What Lenders are Looking For
Your firm needs to be on solid financial ground in order to qualify for a bank loan. In a best case scenario, that means you should be able to show your business has been profitable for the last three years.
Primarily, there are three criteria you need to meet.
The loan department will examine all the paperwork in detail. Don’t be surprised if they even check your social media for clues about the state of your business. Bank loan departments are thorough.
In summary, do your research, prepare well in advance of the loan and completely fill out all the paperwork. Present your business in the best possible way, while staying accurate. The loans are available, and if you prepare adequately, you have an excellent chance of getting what you need.
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