Easy Steps to Getting a Small Business Loan
Before you head off to apply for a small business loan, set yourself (and your business) up for success by learning a few easy steps for being approved for a loan. You have to remember that getting approved for this loan can set you on the path to success while being denied can set you back for months or possibly even years. Improve your chances by making sure you’re well-prepared.
Know Why You Need the Loan in the First Place
Banks don’t like to just fork over cash because you stick your hand out and say “please.” They like to know why you need the money and what you plan on doing with it, so you should be able to thoroughly and succinctly inform a loan officer of why you need a small business loan. Do you need it to start your business, as a source of emergency capital or for everyday business expenses?
Know Which Kind of Loan You Need
You’ll also likely be asked just what kind of business loan you need. For getting your business started, you’ll probably have no choice but to run your business off of credit cards, your own funds and determination. The reason for this is banks usually don’t offer funding to businesses during the first year of operation.
For everyday business, you can opt for a short-term cash flow loan, a line of credit or accounts receivable financing. With growing your business, consider a term loan. Those in need of emergency capital are likely to be better off with either a term loan or a line of credit, either of which should come with a low interest rate.
Find the Best Lender
As you’re doing your research on getting a small business loan, you’ll find there are several different lenders to choose from, mainly banks, microlenders and online lenders. If you don’t need immediate access to cash, have good credit and have collateral, consider going to a bank for you loan. If your company is too small for a traditional loan, you’ll want to go with a microlender. Online lenders are an ideal choice for getting quick cash when you don’t have collateral and haven’t been in business for very long.
A lot of time and preparation goes into applying for a loan. But all of that hard work can go a long way in improving your chances of being successfully approved for a loan and improving your business as well. Best of luck!