Applying for a business loan and securing its approval can be a lengthy process. The actual approval time varies widely depending on the type of loan, its complexity, and the borrower’s timeliness providing the necessary information. This guide from SBA can help you gather the right paperwork, whether you’re applying for an SBA loan or a regular business loan.
But knowing exactly what you’re signing up for is just as important as rounding up the details and completing the paperwork accurately. If you’ve ever purchased a car and found yourself surprised when extra line items turn up on your monthly billing statement, then you’ll know the feeling. With loan agreements, there are devils in the details. That’s why it’s critical to pay attention to the fine print, often found in the promissory note or security interest section of the agreement.
Here are some tips for what to look for and how to avoid potentially costly mistakes:
Common Details Buried in the Fine Print
Some of the key terms that make up a loan agreement aren’t always as explicit as one might hope. The fine print, for example, can include detailed and complex technicalities, qualifications or restrictions of the agreement, and even vital information about the loan’s terms. Things to look out for include: