Monday, September 9, 2013

6 Step Guide- How to Get a Business Loan

Money is one of the major parts of helping small businesses thrive. Whether you are starting a business or expanding existing businesses, securing financing is a big factor. Some entrepreneurs do not know where to start when it comes to obtaining financing through loans. However, here are a few steps to help new and existing entrepreneurs prepare for small business loan applications. First, you should know what criteria banks are looking for in making small business loans. Although the standards vary by institutions, majority will require that the loan be for a sound business purpose, you and/or your partner have good character as well as a good credit history and experience, and have the ability to pay back the loan. Second, you should find out the documentation needed for the loan application. In general, these documents include: personal/business credit history, financial statements and projected financial statements, a strong and detailed business plan, cash flow projections for a least one to three years, and personal guaranties from each principal owner. Next, before even approaching lenders to consider your loan, ask yourself how you can make this process easier. You do this by being prepared, thorough, and truthful to yourself. Educate yourself about the loan application process and the different lending institutions. Another important thing to know is the size of a typical small business loan. These also vary between the banking industry and SBA loans. Small business loans are few, but your best bet it to acquire SBA assistance. Start by visiting the SBA’s website and gain more information about how to secure a loan and the other services provided to assist you. Last, you should work closely with a large network of partners that leverage SBA resources. These networks include SBA/Branch Offices, SCORE, SBDCs, and WBCs. To learn more about these steps, SBA resources, and network partners; refer to the link below.   

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