Usually, the factors that are taken into consideration are the business' or individual's credit score, debt-to-income ratio, and the amount of time the company has been in business.
On the other hand, startup business loans may rely on one's personal credit history.
When requesting a business loan, some providers may ask you to secure it. Please note that we are not a lender, and so we do not ask you for collateral.
You can secure your loan with any asset that has a high market value. Usually, people use their house, vehicle, or jewelry as collateral.
Each lender has its own requirements. Nevertheless, most business loan providers ask for your background and history, resume, business plan, tax returns from over the past three years, credit history, bank statements, debt schedule, and collateral if applicable.
Business loan providers may also ask for your legal documents such as your business's license or registration, a copy of your lease, certificate of formation, copies of any contracts you might have.
The different types of small business loans are the following:
A mortgage is an agreement you make with a creditor to receive funding to buy a house. During the repayment term, the creditor technically owns the house until you fully pay back the borrowed amount.
Typically, you need to pay a down payment of around 10% to 20% of the property's value upfront.
When applying for a mortgage loan, most creditors ask for the following documents: Photo ID, tax returns, pay-stubs, W2, information on other income sources, renting history, credit history, bank statements, and other assets.
The loan processing typically takes around two weeks.
Mortgage refinancing is used to lower the interest rate of a home loan. It involves replacing your current debt with a new one, and it may result in a lower monthly payment, canceled insurance premiums, and a different amount of time left on the funding.
Home equity is the amount you have paid off on your home by now. When you have positive home equity, the amount you owe on your mortgage is less than the fair market value of your house. A home equity loan is when you use the equity you own in your house as collateral.
A reverse mortgage is only for those who are at least 62 years old and is very similar to a home equity loan. It can be used to supplement one's retirement income, offering either a line of credit or a fixed monthly payment to be paid back when the borrower moves away, sells the home, or passes away.
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