Since this money is borrowed, it is usually not provided for free, and there are fees involved. Therefore, you will typically pay back more than the amount that you borrowed.
Two of the most important things to know about your loan is the term and the rate. The term is the length of time you need to pay it back the borrowed money. This can range from short-term (a few weeks) to long-term (5-10 years). The rate is the amount of money it will cost you to borrow the fund. This is usually expressed as a % of the full amount being borrowed.
When it comes to small business loans, it is important to build a relationship with your lender and/or trust who you are receiving the money from. Lenders and banks have different requirements when it comes to who they will lend money to.
When applying for a loan, you can expect to submit a business plan, financial statements, credit score, and tax records for at least two years. You must prove that your business can pay back the money. The bank will evaluate the risk in lending you this money, and they need to know you can pay them back on time and in full. New businesses often have a difficult time getting approved for a loan because they usually don’t have the paperwork required. The approval process can be lengthy and stressful but once a relationship is established and trust is built, it is usually easier to ask for more funding in the future.
The number of small business loan options vary widely and each lender has their own requirements. There are many different types of small business loans. Some can be used towards salaries, hiring new employees, business expansion, supplies, inventory, start up costs, etc. The list goes on and on. It's important to choose the type of loan that best fits your business depending on your size, history, and future plans for how to use the funding.
If you’re interested in learning more - check out our guide: Small Business Grants vs. Small Business Loans.
Ready to apply for a loan? We have two main resources on Axis Helps regarding loans. We recommend that you visit our Funding Guide first. Afterwards, feel free to check out our list of specific loans that are available to Miami-Dade and Florida state business owners.