Business Expansion Loan

Expanding businesses often need money for more equipment, staff, office or warehouse space, and sometimes a new location. Since you have proven a viable business model, these loans are a bit easier to get than other loan types. Your revenues are calculated which makes it easier for lenders to project your ability and capacity to repay a loan. These loans will be made based on past performance and projections. The loan amount will be constrained by cash flow and collateral.

Some lenders will issue a loan even if it is not 100% collateralized because you have stable cash flow. Cash flow needs to be a minimum of 1.25 times your existing and proposed debt payments. The higher the multiple in which you can pay your debt the more likely the loan will be approved.

You may be required to put 10% cash equity into the expansion depending on the purpose. Some equipment lenders do not require a down payment enabling a business owner to obtain 100% financing. The amount you put down will sweeten the request for your lender.

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