New Business Loans »
New business loans are loans made to businesses that are being formed or have been in business for a short period of time. New business loans are not unlike startup business loans, except a new business loan suggests an earlier stage business then a startup business loan. Depending upon the lender, some lenders will make new business loans to individuals who are forming a business assuming those individuals meet certain criteria. Other lenders will require that in order to qualify for a new small business loan the business must be in operation for some minimum period of time, usually one year or less. Because of the risk involved in lending money to businesses that are not established, most new business loans require that the loan be secured by some or all of the assets of the new business and that the loan be personally guaranteed by the owners of the new business.
These requirements limit the lender's risk that a business will default on a new business loan. Because of the risk to the lender, new business loans are usually difficult loans to obtain, particularly if a business intends to be a small business and is therefore, looking for a new small business loan, and often will be available based almost entirely upon the creditworthiness of the owners of the business. Loans for new businesses are available from a variety of sources, including commercial banks, finance companies and government entities.
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