Loans are a way of life for many people. They often need a loan to buy a house or a vehicle because they do not have enough cash on hand to pay the full purchase price. However, problems may develop with the acquisition of too many loans, overwhelming debtors with large payments and high risks. Just like with personal loans, a business attorney Orange County can explain that it is necessary to carefully evaluate the terms of a business loan and whether it is appropriate to take out the loan at the time.
Types of Lenders
A business lawyer Orange County can explain that there are many types of lenders who may be willing to provide a loan to a small business. This includes banks, state and local programs, credit unions, family and friends.
Business owners must be prepared to sign a promissory note stating the terms of the agreement. Having an agreement in writing can help avoid any confusion. The interest rate for the loan should be clearly spelled out and should pass muster under scrutiny by the Internal Revenue Service to avoid any potential tax problems. If there will be a security interest placed as a condition of the business loan, this interest should also be clearly spelled out. Some lenders may insist that the debtor’s spouse also sign the promissory note to avoid potential legal issues.
If you would like more information on business loans, contact a business attorney Orange County from Daily Aljian LLP.