How to Apply for an LLC Loan
Getting an LLC loan can provide you with a way to get funding for your new business venture. The process of getting money for an LLC loan is different from taking out a personal loan. Here are the basics of how to apply for an LLC loan.
Find a Commercial Lender
The first part of the process is to locate a commercial lender. Commercial lenders are different from traditional lenders. These companies conduct business by lending money only to businesses. They have different lending standards and different loan amounts that they are willing to offer. While you could potentially take out a personal loan for your LLC, working with a commercial lender will be better. They will be more likely to work with you for your business and will generally have more favorable business terms.
Look at Loan Programs
Once you locate a commercial lender to work with, you need to talk to them about the various lending programs that they have. Most lenders have multiple loan programs, and all of them will have something different to offer you. One program might have more favorable terms than another.
Business Credit versus Personal Credit
Depending on how well-established your LLC is, the commercial lender might look at your business’s credit or your personal credit. If your business does not have a credit file to look at, they will most likely want to look at your personal credit history. New businesses often have to rely on their owners to make a personal pledge before they can qualify for a loan. Once your business credit is established, it will be much easier to get the credit through the business instead of through a personal pledge. However, at the beginning, the lender will most likely want to see a stellar personal credit score.
When you are about to apply for a business loan, you may need to find some type of collateral that you can offer. When you are a new business, offering collateral in exchange for the loan will increase the odds in your favor. This lowers the overall amount of risk for the lender and makes it less likely that they will lose money on the deal.
The commercial lender will have a loan application that you will need to fill out. They will want to know a great deal about your business and your personal information. Fill out the application as thoroughly as you can and make sure that the lender has all of the information that they need. If you leave out important information, the lender will be more likely to decline your application for financing.
As part of the process, you may need to speak to a loan officer about your business plan. She will want to look at the financial statements of your business and make sure that it has a good potential to be profitable. If everything appears to be in order, she will approve your application and provide you with the money that you need.
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