How to Get a Short-Term Commercial Loan

Businesses need short-term commercial loans to buy equipment, expand or sometimes just for cash flow to get through a slump. These loans must meet specific requirements, or the lender will not feel comfortable enough to make the loan to the business.

Instructions

1. Develop a relationship with a bank before asking for a short-term commercial loan. Do your business banking where you have been doing personal banking for years. Get to know the loan officer there.

2. Decide exactly what you need the money for, how much you need and how long it will take you to pay it back. Do this before approaching your bank for a loan.

3. Write your proposal for this loan and take it with you to the bank. The more professional the proposal looks, the higher this step scores with your banker.

4. Secure your short-term commercial loan with collateral. Your bank will need something worth more than the amount you are asking. Examples of acceptable collateral are stock, bonds, paid for business vehicles or a second mortgage on your business property.

5. Make sure your business can withstand scrutiny. The bank will ask for cash flow records and sales history. The banker will also look at any other debt your business has and consider those.

6. Produce your bank checking account records for at least the last six months and your tax returns from the last two years. Your bank will ask for the exact records you need so have these records ready.