Business loans can be lifelines for businesses of all sizes, helping businesses to deal with seasonal fluctuations in sales or unexpected expenses. They can also be used to invest in new equipment, inventory or a new location. The most important thing is to utilize the funds wisely, so you can expand your business and avoid relying on debt financing in the future.

Before you apply, consider the amount of capital your company requires and which loan is best suited to meet those requirements. You will also need to know the amount of time you’ll need to repay the loan, as this could affect your fees and interest rates. Many lenders offer a one-time funding option or a credit line with terms of repayment that range from just a few days to several years.

Most lenders will require you to submit a range of documents, such as your business plan financial statements, as well as your credit history. They may also require collateral, like a real estate, equipment or cash due to your company (accounts payable). Some lenders will waive these requirements for established customers, those with excellent credit, or those looking for large amounts of capital.

The lender why not try here will also consider whether your company is able to repay the loan, using a number of metrics, such as its fixed-charge coverage ratio as well as the amount of cash it will generate each month. They will also determine if it has any outstanding debts as well as assess its compliance with all legal requirements. Finally, they will examine your industry to determine if it’s classified as volatile or a stable industry.