What Is A Small Business Loan?
Small businesses are the backbone of the economy. They're a necessary part of a local community, employing locals and providing goods and services that might not otherwise be available. Small businesses, startups, and entrepreneurs can innovate and transform a local economy, pushing it in a more productive direction.
If you are a small business owner, there might be times when you need a little extra liquidity. Are you ready to open that taco truck? Do you need to make improvements to your commercial real estate building? How about upgrading equipment in your printing business? These are only a few examples of how small business loans can help you with your business needs.
Small business loans provide you with the funds you need to start, maintain, improve, or expand your business. You can get a small business loan from many lenders, but credit unions are typically a great fit. They are a good option because they offer unique advantages for small businesses, fostering growth and community support. By choosing a credit union, you're not just getting a loan program; you're becoming part of a community that supports local businesses.
A small business loan gives business owners the financial support to operate, start, or expand their company. The most common types of small business loans include:
Once you find the right type of small business loan for you, the next challenge is to find a lending partner and secure your ideal loan terms.
Credit unions are focused on their members and their specific needs because members are owners of the credit union itself. Credit unions almost always offer lower interest rates and fewer fees, especially compared to finance companies and traditional banks. Federal credit unions are prohibited from charging prepayment penalties. Credit unions can offer you more flexible terms and lending parameters. Local decision-making and quicker loan application approval processes are additional benefits of working with a credit union.
If you're looking to open or expand your business using a loan, you must present a business plan to qualify for a small business loan. In addition, you will need to provide tax returns, current financial statements, and a positive credit history. These additional things show that you can and most likely will repay the loan.
The application process includes:
Additional documents may be requested, such as copies of bank records, documentation of on-hand inventory, a copy of the business license, a list of assets, a schedule of debts, and an accounts receivable aging report.
Credit unions can provide one-on-one consultations with borrowers. They strive to support their members' needs if possible, often offering more flexibility than traditional banks. In addition to business loans, they offer other services including deposit accounts, credit cards, and financial education.
Small businesses are an essential part of every community, from big cities to small towns. A small business loan can help your business upgrade, grow, cover payroll during slow periods, and more. With varied types of small business loans, it's easy to find one that fits your needs.
A credit union makes a great partner for your small business loans. It's time to take the first step toward the small business loan you need. ProFed Credit Union is ready to meet your needs. Schedule an appointment with us today.