Find the right lawyer now

Business Loan Lawyers

Find a Local Business Lawyer near You

Business Loan Lawyers

Most entrepreneurs need to take out a loan to finance their business. Usually, business owners borrow money from a financial institution and are expected to pay it back with interest. That means regardless of the success or failure of your business, you have to pay that money interest back to the lender.

If you get financing through investors, then you have no obligations to pay them back. Investors simply share in the profits of the business if it succeeds, and lose money if the business fails.

Although investors can be great, the benefit of using a loan is that you are wholly the owner of the business. As an owner, you get to keep any money you make that is not used to pay back the loan. When an investor gives you money, she is buying a part of your business. This means that you must share your profits and somewhat tailor your policies and practices to her expectations.

What Will I Need to Pay When I Receive a Loan?

There are a couple factors you should consider when you are looking for a loan for your business:

·                Interest - State usury laws generally require that the interest rates on these kinds of loans be capped at a fair price. Usually it is around 10%, so that no one can charge huge interest rates on a loan.

·                Security - You will have to provide security, in the form of an asset. A security interest could be your business's equipment, inventory, or even the deed to your home.

What Assurance Must I Give a Lender?

You may need a cosigner or guarantor to sign for the loan as well. This is generally someone who has as good, if not better credit, than you. By making a person a cosigner or guarantor, you are making them also personally liable for the loan repayments. Due to this liability, make sure you inform your cosigner of the consequences. The purpose of this is so that the lender has two people to collect from, instead of one if the loan is not repaid in time and in full.

Should I Consult a Finance Attorney When I Am Applying for a Loan?

Yes. The loan process can be complex, especially since the laws vary so much from state to state. An experienced business attorney can help guide you through the loan application process. An attorney can also give you legal advice if you get into any other financial trouble along the way.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 05-17-2018 11:05 PM PDT

Law Library Disclaimer
  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service
What is LegalMatch?

We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.