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SMALL BUSINESS : Small Business LoansSooner or later most small businesses need to get a loan, whether to get the operating capital for business start-up or to finance an expansion. But whether you're approaching a bank or a friend for a small business loan, the lender will have the same expectations. You can greatly increase your chances of successfully securing a small business loan by being prepared to meet those expectations. Put yourself on the other side of the desk for a moment. If someone asked you for a small business loan, you'd want to know exactly why he or she wanted the money and what the chances were that he or she would repay the loan in full and on time. So the key to getting a small business loan is preparation. First, gather together the documents that will help persuade the lender that a small business loan is necessary and that you are a good risk. You will need: A business plan - The business plan show the lender not only why you want a small business loan but what you plan to do with the money. Cash flow projections - What's the first question any lender has? Will you be able to repay the loan. Your business's cash flow projections give lenders concrete financial data that they can use to assess this risk. A statement of your personal financial status - A list of your personal assets and debts to give the lender a fuller financial picture. To get a small business loan, you may also need these documents: Past business tax returns - If your business is established and you have past business tax returns, it's a good idea to take them with you. They'll give the lender a better idea of how your business is doing financially. A credit rating report - Basically, you establish a credit rating by buying things on credit and paying back the money you owe. Your loan repayment history plays a big part in establishing your credit rating, but all your "credit" dealings make up the history that's used to determine your credit rating. It's not necessary that you include a credit report with your small business loan application; it's easy enough for potential lenders to check your credit rating. But if you don't know what your credit rating is or suspect your credit rating is tarnished, you may want to get one. You can get a credit report by contacting one of the three credit reporting agencies in Canada, TransUnion, EquiFax Canada, or Northern Credit Bureaus. To receive your free credit report, you will need to mail or fax one of these companies a request along with copies of two pieces of I.D. The credit report you receive several weels later will include information on what to do if you find errors in the report. If you have a poor credit rating, you will want to take steps to repair your credit rating before trying to get a small business loan. Now that you have all the documents you need to get a small business loan in order, how do you actually persuade the lender to give you a small business loan? Continue on to the next page for tips on making a winning business loan presentation. The next step in getting a small business loan is to persuade the lender to give you a small business loan. You need to prepare in advance to make a winning small business loan presentation. Start by considering the lender's point of view. You want money. But he or she is most interested in the answers to these two questions: "What are you going to do with the money?" and "Are you a good risk?", and to make a winning small business loan presentation, you need to come up with the "right" answers to these two questions. Answering the first question means being fully conversant with all the details of your business plan and being able to point to the relevant financial statements, charts or graphs that will help convince the lender that you need the amount of money you're asking for to do what you want to do. Answering the second question means having already given some thought to the credit risk you represent to the lender and being ready to address his or her concerns. To get a small business loan, be prepared to tell your potential lender: What collateral you have - Collateral refers to the tangible assets that you are willing to put up to secure the loan. These assets might be equipment, a house, a car - something of value that you own. If you fail to repay the loan, then the proceeds from the sale of the assets is used for repayment. How much money you're personally willing to put into the business - Being willing to risk your own money shows the lender that you're committed to the enterprise. Your expertise and/or experience in your chosen field - Because the success of your business is dependent on this to some degree, any potential lender will want to know more about you. Be prepared to talk about yourself when you apply for a small business loan - your background, your expertise, and even your aspirations. Your chances of getting a small business loan will be greatly improved if you have all your documents in order and are prepared to assuage the lender's concerns about loaning you the money. Think of it as a presentation to an important client or customer, and you'll have a better chance of success. by Susan Ward - about.com Opening a Small BusinessAspiring entrepreneurs are fairly excited when they make the decision to open a small business. Sharing this news with friends and family usually generates a response referring to...Starting a Small Business IdeaYou have thought out an angle for starting a small business idea that is going to revolutionize the industry. Are you willing...Good Small Business PracticesGood small business practices require good business etiquette. To succeed in starting a small business, it's not enough to be the first, the best, or the most competitive...Ergonomics and Modern Workspace DesignToday, few small businesses need concern themselves with a lot of hard labor, but workers are breaking their backs at a whole new kind of grind, spending up to fourteen hours...Small Business LoansSooner or later most small businesses need to get a small business loan, whether to get the operating capital for business startup or to finance an expansion. But whether...American Small BusinessesEven today, the American economy is by no means dominated by giant corporations. Fully 99 percent of all independent small businesses in the country employ...Other Related Articles: Getting Small Business Loans in a Recession with no Collateral Sep 2, 2010Th? global financial crisis h?? m?d? ?t difficult f?r all types of business including small businesses t? g?t business loans. But there a couple of things you cn try to get the much needed loan....Obama's proposed SBA loan changes will help few small businesses Feb 26, 2010The Obama Administration recently proposed changes to the Small Business Administration's ( SBA ) loan guarantee programs to help small business owners whose access to credit has been reduced as a by-product of the financial crisis...SBA loan breaks waiting list has started Feb 22, 2010The Small Business Administration ( SBA ) has run out of money for incentives that made its loans less risky for lenders and cheaper for borrowers. 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Small businesses ...U.S. allows more firms to seek small business loans May 1, 2009The Obama administration will allow about 70,000 more firms to apply for small business loans guaranteed by the government by temporarily raising size limits for the program, government ...Federal Plan to Aid Small Businesses Flawed April 1, 2009Two weeks after President Obama announced a $15 billion initiative to spark lending for small businesses, every major provider of these kinds of business loans ...How to Get Small Business Loans March 27th 2009Getting a small business loan in this economic climate can be tricky, but it is certainly not impossible. When getting a small business loan, banks will...How to Win Small Business LoansYou've got the ideas, the desire, and the plan. All you need at this point is some more money, right? Working with banks on small business loans ...Small banks offer business capitalThe latest credit crunch will make it even harder for small businesses to secure business capital. But some small banks hope to fill the void ...Most small businesses can get loansWASHINGTON — Despite a global credit crisis that has shaken some of the biggest Wall Street institutions, most small businesses are still able to get bank loans ...Small business marketsBILLINGS - The new regional director of the Small Business Administration says small-business owners report banks are reining in credit ... |
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