Never sign for a business loan until you have read the entire document, and never, under any circumstances, sign a blank document or a document with empty lines that could be filled in later.
When you are reviewing the document, keep these key points in mind:
- Avoid loans with balloon payments.
- Always choose a loan with positive amortization. Otherwise you may find your loan balance getting bigger each month instead of smaller.
- Finally, beware of high prepayment penalties.