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Business Loans - Banks

Banks are the traditional source of finance for growing a business. Banks normally require a prospective borrower to have good credit, equity (a personal financial stake in the business), collateral (assets that can be liquidated to pay off the loan in case of default) and an obvious source of cash for repayment. The average interest rate for a bank business loan is approximately 10%. Depending upon what the financing will be used for, bank business loans can have terms of from 5 to 15 years. If short-term cash in needed for your business, then a bank line of credit is normally the answer. A line of credit allows you to borrow and pay back cash as needed (with some restrictions) and only pay interest on the balance outstanding.

Use this software from the Bank of New Mexico (under construction) to see if you qualify for a bank loan and to find out what paperwork you need to take to a bank to apply for a business loan.

If you need assistance with credit problems or managing your debt, contact nonprofit credit counseling such as the National Foundation for Consumer Credit (800-388-2227), the umbrella organization for about 1,400 Consumer Credit Counseling Service Offices

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Last Updated on March 5, 1998