All types of businesses in many industries require loans at one time or another. Some might choose an unsecured business loan while others may decide invoice financing or opening a business line of credit is best for them. But did you know there may be loans that are specific to your industry or profession? Most commonly for those in working in medical, legal or insurance fields, these loans can be used to help finance office space, equipment or other necessities.
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What is a professional business loan?
Professional loans, also called industry-specific loans, are designed for the needs of businesses in certain industries. There are many professions that may have loans specific to their industry including:
Architects and more
The types of available loans, loan amount and approval criteria, and collateral options will vary depending on the industry but generally, the loans will help you finance the investments you need to keep growing. This may including renting office space for your practice, purchasing expensive equipment or inventory, managing cash flow and more.
While other types of loans might offer similar benefits, with a professional loan, your lender likely has prior experience working with professionals in your industry and may better understand your unique challenges and opportunities.
How does a professional business loan work?
Loans for professionals can be either secured or unsecured. With a secured business loan, financing is secured by a valuable asset that you own (such as accounts receivable, a home or equipment) as collateral. With an unsecured loan, you are not required to provide an asset as collateral.
Similar to other types of loansfor businesses, lenders will evaluate your application based on a number of factors including:
Your personal credit history
Financial statements and projections
The value of the asset being used as collateral
Your business plan
Length of time in business
Other personal and business financials and more
Given that they may have experience lending to others in your industry, they may also consider unique factors about your professional during the approval process.
3 Benefits of a professional business loan
There are a number of benefits if you apply for a loan that is specific to your industry
The fact that the lender may have a deeper understanding of your industry may increase your chance of success.
The lender may have additional insight into the overall health of your industry or niche area.
Lenders may have gained more knowledge about the unique challenges and opportunities in your industry.
How do I apply for a professional business loan?
Find your preferred lender - Search for a lender that has specialises in your industry and compare fees and interest rates of different providers. Consider speaking with a business advisor or your accountant.
Prepare your financial information - Lenders will want to see detailed information about your business’ financial history, including a business plan, income, expenses and projected cash flow statements.
Decide your preferred loan terms – Decide in advance the loan amount required, your preferred rates, time period and whether you want the sum upfront or in installments.
Application assessed – Once you’ve applied, your application will be assessed according to the lender’s criteria.
Receive your funds – Start putting the capital toward your business growth!