Getting approval for a small business loan can determine whether you’ll be able to open or expand your business. Expect lenders to carefully scrutinize your loan application. Bankers, as a rule, don’t like to gamble. They want to ensure the decision to grant you a small business loan is a good one. It’s essential that you take all the necessary steps to help boost your chances.
Seek help from a professional from the Small Business Administration. Trained counselors, usually found at field offices in colleges and universities across the United States, can help you develop your plan, free of charge. Call your local SBA office to find the nearest expert who can help you.
Check your credit report for mistakes. The three major credit reporting agencies -- TransUnion, Experian and Equifax -- often make errors on reports, errors that make your score appear lower than what it really is. Get those mistakes corrected before applying for your small business loan. Lenders look at your credit score before granting loans.
Make a business plan. You need to give the lender a reason to trust that your business would be a good risk. A comprehensive business plan should explain what your business does, the opportunities available and the risks you might face. This shows you have done your research. List the people who will run the business and their credentials. Include how much money you’ll need and where the money will go. Include balance sheets, a cash flow statement and a statement of projected income.
Describe your payment plan. Let the lender know that you plan to pay back the loan by demonstrating just how you intend to do so.