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Commercial Loans FAQs
Frequently asked questions
Here are some of the common questions that are asked about
commercial loans:
What is the usual length of a loan?
Loans are typically available for any time period between
1 to 15 years.
Why take a loan when I meet my needs with cash?
A loan preserves cash and liquidity. You might be able to
secure better conditions on your loan when you are not in
dire need for cash. A loan can also provide a over cash.
How does my personal credit history affect my chance
of getting a commercial loan?
Lenders use your personal credit history to help them decide
whether you are a good risk for a loan (especially in the
case of sole traders and partnerships). If your history includes
late payments or bankruptcies, you should include a letter
with your application explaining the circumstances and how
they have changed. This can soften the impact of these black
marks against you. Always be honest about your credit history
- covering up problems is the fastest way to get shown the
door.
How can I improve my chances of getting a loan?
Be prepared to demonstrate why you have a solid chance of
repaying the loan. It will be extremely beneficial to be able
to show the lender a history of your earnings and a projection
of future earnings. It is also beneficial to show that you
have invested in your business, the lender will more comfortable
knowing that your interest are aligned with its.
Who is responsible for the repayment of the loan?
The legal structure of your company will determine who is
responsible for the repayment of the loan and who will be
liable if it is not repaid. If you are a sole trader, you
bear all the responsibility and potential liability. If your
have formed a partnership, all of the partners involved are
jointly and individually responsible. If you a legal company,
the Directors may be liable if the loan is not repaid.
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