LookingForBusinessLoan.com - Business Plan and Business Loan Infomration

Business Plan and Business Loan Information

A business loan is a debt instrument provided to your business by a bank, financing company, or private investor that intends to receive regular interest payments on the borrowed amount. Business loans, unlike business lines of credit, are provided in a lump sum much like undertaking a mortgage or similar debt instrument. Although the common principles and mechanics are the same as any other loan, business loans often have a number of different attributes that are significantly different than a personal loan or mortgage. Common purposes for a business loan include, but are not limited to:

Development of a new business
Acquisition of an existing business
Purchase of tangible real estate for business purposes
Purchase of machinery or business equipment
Working capital

Additionally, it should be noted that business loans often come with “covenants”. These covenants stipulate the amount of revenue you must continually generate, your minimum profitability, and the collateral that is secured by the business loan. The collateral that secures the business loan can vary from personally held real estate, commercial real estate, receivables, or commercial machinery.

Additionally, there are several different types of business loans available. These include:

Conventional Business Loans
Commercial Mortgages for Property Acquisitions
Asset Secured Business Loans
SBA backed Business Loans
Non-Recourse Business Loans
Bridge Loans
Promissory Notes (usually granted by private individuals)

When determining which type of business loan is most appropriate for you, it is extremely important that your business’ accountant review your financing options. These individuals will ensure that you are selecting the correct credit facility that is most affordable and most sensible for your business.

You may also want to consider hiring a SBA loan consultant or qualified commercial loan broker to assist you with the ongoing documentation, business planning, and financial planning that is associated with obtaining any type of the financing discussed above. We very much recommend that you review a number of the documents and articles that we have produced so that you can have a better understanding of how to properly secure financing while understanding the nature of the financial obligation that you are undertaking.

Below is a list of articles that will focus on the process of looking for business loan and other credit facilities.