A business loan is money borrowed from a bank or financial institution to help grow or run your business. It can be used for various purposes, like purchasing equipment, expanding operations, or covering day-to-day expenses. Business loans are typically repaid in monthly installments with interest.
There are different types of business loans, such as secured loans, where you offer an asset (like property) as collateral, and unsecured loans, where no asset is needed. The interest rate and loan amount often depend on the business’s creditworthiness, which is determined by its financial health and credit score.
Before applying for a business loan, it’s important to have a clear plan on how you will use the funds and how you will repay the loan. Lenders will also look at your business’s financial history and future prospects to decide if you qualify for the loan. A business loan can help fuel growth, but it’s essential to borrow responsibly and ensure you can meet the repayment terms.