When you apply for a small business loan you’ll likely be asked to fill out an application called a Shop Fund. This is where you’ll list the type of small business you are, how much you plan to borrow and how much you need to repay. The information on your Shop Fund application will depend on the type of loan you apply for and the amount you need to borrow. For example, if you have a small motorcycle dealership you may want to include motorcycle parts or accessories as part of the inventory you offer on your vehicles. If your small retail establishment offers credit cards for purchases you make you may want to include those types of items among the items you sell in your establishment.
Many small business owners apply for multiple loans with different lenders to finance various aspects of their business. It’s not unusual for multiple business owners to apply for one type of financing and then submit separate applications for Shop Fund loans and other lines of credit from different lenders. This is especially common when an owner has significant assets such as inventory or franchises. You can even apply for a Shop Fund loan using your personal credit or a line of credit from your bank. As long as you can demonstrate to a lending decisionmaker that you have sufficient income and a viable business plan to prove that you’ll repay the loan, most banks and credit unions will be willing to issue you a line of credit.
Shop Fund lending isn’t the only option for small business owners who need quick cash. There are many other options available to you including private lending sources such as friends and family members, business investors and financial institutions such as credit unions. Your local bank should be able to give you some good advice about the options available to you for small business loans. If they can’t help you find a source of financing for your business, most will still be happy to sign you up as a business owner on your first attempt at obtaining financing for your small business.
Shop Fund lending isn’t limited to just small businesses. Even large corporations with long-standing profits can obtain small business loans to expand and grow. Shop Fund lending is particularly useful for start-up companies that are in early days and don’t yet have established themselves. A start-up business often has limited funds available, which is why a short-term loan from a lending company like Shop Fund is so helpful. The start-up company will pay the Shop Fund loan back well before it begins generating profit, helping it build its credit history and marketability.
Many start-up companies have very little capital to work with, so obtaining small business loans is essential to helping them get off the ground. Even if your business has the resources to continue trading while it is being run under a Shop Fund agreement, you may still want to consider small business loans to help you grow and maintain your business. This can take the form of a lease, equity or a partnership.
Shop Fund lending isn’t limited to new small businesses either. Many existing businesses use small business loans to help them finance growth, buy new equipment or expand their retail locations. Small business loans are also sometimes used by companies to repay outstanding debts such as student loans. When searching for a small business loan, it’s important to thoroughly check all of the qualifications and terms of the agreement. Doing this will help you find the best loan for your needs and will give you the peace of mind that comes from knowing that your business will be able to continue operating as usual even if you don’t have access to cash on hand.