How To Get Business Expansion Loan?

Business expansion loan provides the business owners with the business financing required for the business expansion. Business expansion loans are usually preferred when there is a shortage of staff or funds, inventory gap when the market is untapped, and similar other things. The biggest mistake made by business owners these days is to wait until the market is hit before expanding their business. This tactic may be at a disadvantage as businesses may never recover at times.

Obtaining a loan for business expansion can prevent this by providing the business with enough funds to be able to handle it. The business expansion loans vary for each business type.

Your business should be running for a minimum of two years to be qualified to get a business expansion loan. Once you are ready to expand your business, there are a number of ways in which you can get a business expansion loan such as the following

Term loans

A term loan is considered the most suitable option for expanding your business. Here, a certain amount is provided for expanding the business which can then be paid after a period of time along with the interest. One can avail up to a maximum of  5,00,000 via term loans.

SBA Loans

These loans are government-guaranteed that provides the businesses with low–interest funding. This funding in turn can be used for the expansion of business. This type of business financing is considered ideal for businesses having a good credit score. With this loan, you can avail of up to 25 million. However, it is quite challenging to get qualified for SBA loans. It is because, in order to avail of SBA loans, one needs to have a good credit score of 680 and above.

Equipment financing

These loans can be availed to purchase equipment. Here, you can avail yourself up to 100% of the equipment cost. The requirements to avail of this loan are

• 1.) You need to have 2 years of business history
• 2.) Your credit score should be above 630
• 3.) Business turnover should exceed $13000 every year
•  

Business line of credit

Here a credit limit is given within which the loan amount can be availed. You can use this amount for any business purpose. The requirements to avail of this loan are

• 1.) You need to have a 1-year business history
• 2.) Your credit score should be above 630
• 3.) Business turnover should exceed $18000 every year
•  

Short – term loans

The requirements to avail this loan are

• 1.) You need to have 2 years of business history
• 2.) Your credit score should be above 600
• 3.) Business turnover should exceed $15000 every year
•  

Uses of business expansion loan

Business expansion loans can be used for a variety of reasons such as the following

• 1.) Growing the team
• 2.) Expanding business to a new market
• 3.) Expanding the business product line
• 4.) Expanding the business literally
• 5.) Purchasing of new equipment
•  

Things to prepare to get business expansion loan

1.) Prepare a growth plan that is more realistic

2.) Before you set for the search for a loan, know the type of loan you are qualified

How to apply for a business expansion loan?

The following documents are required before you apply for a business expansion loan

• 1.) Business plan
• 2.) Valid ID proof
• 3.) Business license
• 4.) Bank statement
• 5.) Balance sheet
• 6.) It returns
• 7.)Time of the business
• 8.) Business  debt document if any