A business loan is a loan specifically intended for business purposes. Like other loans, it involves the creation of a debt, which will be repaid with added interest.
Businesses require an adequate amount of capital to meet startup expenses or pay for expansions. Companies go for business loans to gain the financial assistance they need. A business loan is debt that the company is obligated to repay according to the loan's terms and conditions.
Such loans can be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery, or equipment, but they can't be used to pay existing debts or purchase real estate.