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Build your venture with a business loan.

Many business owners may need additional funding, whether they run a startup or a thriving business. Learn about how loans can help you realize your financial goals.

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A person reviewing business loan documentation at a desk

It’s business (loan) time.

Business loans are like any other form of loan — lenders offer them to businesses in exchange for payment on the value of the loan (known as principal) with added interest.

Business loans come in dozens of different varieties and forms, with various kinds of repayment plans. Knowledge about the most common types of business loans can help you navigate which one might be right for your business, and may even help you discover opportunities you weren’t aware of.

While there are many different types of loans, there are two broad categories: 1) private and 2) federal or state-subsidized loans.

Federal and state loans

For small businesses, there are several loan options available through the US Small Business Administration (SBA). While there are many loan types that fall under the SBA’s umbrella, the most common are Paycheck Protection Program (PPP) loans and disaster loans.

PPP loans were established in 2020 to offer low-interest loans to businesses who need to subsidize employee wages after economic hardship due to COVID-19.

SBA Disaster Loans are also designed to help businesses hit hard by the pandemic, but they can also help businesses that have been negatively impacted by a disaster like a hurricane or forest fire.

Many states and the federal government also offer low-interest loans and grants to many different business sectors. That list is a bit more extensive than the information provided here, so take the time to explore what aid and loans are available for businesses in your industry, and you might unearth some excellent opportunities.

Private loans

When you start looking to the private sector for loans, the results can be hard to understand if you don’t know what you’re looking for. There are hundreds of lenders and thousands of different financing options. But if you have a rough idea of the total principal amount of the loan you need, and what interest rate you can handle, you’ll be in a better position to be able to sort through the options available to you.

Most commonly, you’ll find a private business loan through a bank, but there are also independent lenders and credit unions that have options as well. However, it is important to make sure to keep an eye on the interest rate, as private lenders often have higher rates.

Digitally signing a loan agreement using Adobe Sign

Choosing the right loan for you.

Whatever type of loan you’re looking for, you should strive to make sure that you find one that suits your business needs, has an appropriate repayment plan period, reasonable monthly payments, and good terms and rates. There are many different repayment terms for a loan recipient, and long-term and short-term loans are possible options. Loans are also subject to refinancing — renegotiating the payment terms of a loan after some of it has been paid.

When it comes to searching for small business loans, it is helpful to remember: you’re the client. These lenders are selling to you, not the other way around. Taking the time to shop around may help you get an array of rates, options, and terms to choose from.

Some types of lenders you could look into include:

  • Direct online lenders
  • Commercial banks
  • Local community banks or credit unions
  • Peer lending sites
  • SBA loans and SBA loan programs (including coronavirus assistance)
  • Microloans (loan amounts up to $50,000)

When you’re making the decision to take out a loan, it’s important to have a sense of your goals and to have accurate accounting. Taking on debt is sometimes an essential part of the lifecycle of many businesses, so be sure to track on your balance spreadsheet any debt you take on.

When you’re doing all this paperwork, Adobe Acrobat can be a vital part of the process. Acrobat helps keep your documents organized and accessible nearly anywhere, on almost any device. And, if you’re going to be working in and out of the Microsoft Office Suite, the cross-compatibility with Adobe apps makes pulling together presentations and documentation more streamlined and easier.

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Business loan application steps.

There are usually three parts to preparing for and applying to a lender for a business loan.

Get assessed.

First, you’ll be assessed by a lender before you can dive too heavily into the documentation process. Some primary factors that will determine your eligibility for a loan are credit history (business credit score), cash flow (how much money is moving through your business currently), and available collateral (property and other assets you offer or put up to secure the loan).

These factors help determine how much you’ll be able to apply for, whether you’re seeking a private loan or one through the SBA. If one of these factors isn’t in great shape, that can affect the overall loan availability. But a strong showing in one category (for instance, if you have many assets as collateral) may help you mitigate a deficiency in one of these factors.

Compile the document haul.

Next, the lender will likely ask for more documentation. This is a great time to start organizing things in a cloud library for easier sharing and access. Acrobat for business can provide the assist with a searchable online library of all your important documents.

The most commonly needed documents to have available are:

  • Tax returns and tax documents
  • Credit score information for both yourself and your business
  • Business and personal bank statements
  • Business plans, including a growth plan

Acing the application process.

Once you’ve got all the documentation together, and you’ve passed through the initial assessment, it’s time to work through the full loan application.

If you’ve done your due diligence, this part shouldn’t be too difficult. But it can be a pain to print, scan, and send all sorts of documents. With Acrobat, you can organize, manage, and sign all the documents you need for a loan application with a minimum of fuss, and many loan applications will allow electronic signatures.

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