Basics of borrowing money

Think of a business, but do not have the money for him. No, you're not alone. This article explains the basic principles of lending.

A loan is money that is borrowed and must be returned with interest. If you borrowed money from institutions such as banks, it is called trade credit. Money that is borrowed from a friend or relative, is known as personal loans.

The debtor or the debtor's business or that of the loan

The creditor or the creditor is the source from which the borrowed money. In the period or periods, it is time, which is designed in which the debtor has used borrowed money for the loan is repaid. The duration of the loan is if the loan term reaches its end. Most important is the amount that is borrowed from the lender.
If you or your business borrows money, the lender wants to know where your money back. Keep this in mind, if you are interested in a loan source.

If the company is unable to repay loans, credit the source has the right to legal ownership of the money to give back. The extent to which you are personally liable depends on the structure of your business operates under.

If you're approved for a loan, you need regular payments (usually on a monthly basis) plus interest. A loan can sometimes be set up as a balloon loan.

Lending institutions
Business loans generally fall into two broad categories: short-and long-term loans. Short-term loan is a loan repayable within one year. Examples of short-term loans include:

Working Capital Loans
Accounts Receivable Loans
Credit Line
Long-term loans, loans repayable usually one to seven years. Long-term loans are usually used for:
expansion of work
purchase of equipment
Real Estate
Most business loans that are used for starting a business are long-term loans.

When an establishment of trade credit will be given to you as the owner of the company as well will be given to the company alone. One way to make money is borrowing money credit and want to be sure of how it is possible for their money back with interest.

The time between applying for a loan and learning that have been approved (or disapproved) can vary. Approved, it may take several days, although it usually takes longer. It may take several months to see if you or your company has the approval of the loan.

Loans from family and friends

If you do not want to or can not obtain commercial loans, you can examine how the private loans from family or friends. This is usually a real informal. You should be careful because this can lead to ruined relationships.

If you are have a private loan in the best interest of creditors to an agreement in written form. The written agreement is the principal, interest and terms of repayment. This is in a better position, or the creditors to write off the loan on your tax return or legally come after you.