How To Get A Small Business Loan? – You always need to finance to power your small business. If you don’t have the money available you can take a small business loan.
Before you start to research for getting a small business loan, there are some key points which should be kept in mind. First of all, you need to figure out how will you use that money it means how will you pay it back.
In the absence of a strategic target plan, you cannot put that money to work. A small business owner should understand the financing options available to grow the business. The small business lending companies in the U.S. are authorized to provide Small Business Administration to provide loans and debt instruments to small business.
How To Get A Small Business Loan?
Amount of business loan and the reason for
Obviously, you need a small business loan for a reason. In case a business is a start-up this is necessarily true. The owners of a startup can process of determining the number of funds they require.
The owner needs to clearly articulate why they require a business loan. To give a reason for the requirement of the loan and the owner must prepare their financial statements as part of their business plan.
Visit the SBDC office and check the local score
You need to get the advice and help from the experienced executives, especially when your business is a startup. If you have a SCORE in your area, it is a wonderful and free source of help.
SCORE is a non-profit, volunteer group, here you can get the help of retired business executives. You can also get the online advice and online counseling.
Check your credit history and score
If you are the owner of a is a startup business or your business is less than three years old, your personal credit history will be evaluated. Before you apply for a small business loan you must arrange all your personal credit history records in order.
You need to request your credit report from each of the major credit reporting agencies. Check these reports and if you find any errors make them correct with the agency.
Note: A credit score of about 700 is good and increases the chances of loan approval.
Review the borrowing options
Check the commercial banks available to you, don’t go for national commercial banks. The better chances of getting a loan are in the smaller regional commercial banks. A non-bank institution may be the option such as a credit union.
If you are the member of a credit union you need to talk the loan officer there. If they offer such loans just get a loan application and fill the same. Don’t worry if one lender says no to you another might approve your loan so keep on trying. You can also go for microfinance loans that are designed for startups.
Make a business plan
It is an important step to get a small business loan, you must have a good business plan. The best plan increases the chances of getting a loan much fast and you need to repay it faster.
A business plan includes project financial statements for your business. It includes collateral or the value of assets you will use to get a secured loan.
Make a presentation and fix the appointment
To give your application to the loan officer you need to prepare a presentation of your business plan as well as application. Make financial statements, spreadsheets, graphs, etc. Don’t forget to make an executive summary first.
Then make an appointment with your loan officer and request enough time to do a short presentation. Be organized and concise while presenting your details.
How To Get A Small Business Loan?