What is the usual length of a loan?
Loans are typically available for any time period between 1 to 15 years.
Why take a loan when I meet my needs with cash?
A loan preserves cash and liquidity. You might be able to secure better conditions on your loan when you are not in dire need for cash. A loan can also provide a over cash.
How does my personal credit history affect my chance of getting a small business loan?
Lenders use your personal credit history to help them decide whether you are a good risk for a loan (especially in the case of sole traders and partnerships). If your history includes late payments or bankruptcies, you should include a letter with your application explaining the circumstances and how they have changed. This can soften the impact of these black marks against you. Always be honest about your credit history – covering up problems is the fastest way to get shown the door.
How can I improve my chances of getting a small business loan?
Be prepared to demonstrate why you have a solid chance of repaying the loan. It will be extremely beneficial to be able to show the lender a history of your earnings and a projection of future earnings. It is also beneficial to show that you have invested in your business, the lender will more comfortable knowing that your interest are aligned with its.
Who is responsible for the repayment of the loan?
The legal structure of your company will determine who is responsible for the repayment of the loan and who will be liable if it is not repaid. If you are a sole trader, you bear all the responsibility and potential liability. If your have formed a partnership, all of the partners involved are jointly and individually responsible. If you a legal company, the Directors may be liable if the loan is not repaid.