How to Get a Small Business Loan

As a small business owner, the toughest task is finding money to run your company. Being prepared when attempting to get a business loan is very important. The presentation can make or break the, so you want to be as prepared as possible.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Small business idea
• Patience

1. 
    
   Their are several resources that are free to help you develop your business plan.

   First, you must already have a well written and thought out business plan. This is very important. Banks and other financial institutions would like to know what it is you will do with their money and also if you will in fact be able to pay it back. Take your time and actually work on your plan.

2. 
    
   Be sure your list is detailed, no matter how long it may seem. The smallest items are to be included.

   After you have developed a plan, you want to think of how much money you actually need and what is you plan to do with it. Be sure to be accurate, so make sure your request is enough for your investment. Itemize what it is you plan to do with the money. Every penny which are requesting must be accounted for. It may be easier if you categorize the items which you plan to purchase: operations (employees, advertising etc.), real estate, assets and so on.

3. Now you have to take a look at your personal financial status. Since this is a new business, there is no credibility based on the company itself. Lenders will use your financial credit as a back up. You can compose a list if your assets and debt just to give an idea of your financial situation.

4. 
    
   Get the money you need, stay professional and focus.

   Finally, the most important step is to develop a plan to repay the loan. Lenders want to know what time frame they will receive their money in. You have to be able to explain how this is a good investment and will profit from, so that you are able to pay back the loan. Now, with all these things in order you are able to apply for a business loan.

Tips & Warnings

• Applying for a loan through your personal bank should be your first choice. They are familiar with you and usually have offers for existing clients.
• You may also want to consider joining the SBA (Small Business Administration). They have many features to prepare new small business owners and walk you through the important steps.
• Don't be discouraged. If you're turned down by one lender, just move on to the next. Have confidence that a lender will believe in your business as much as you. Develop a list of lenders that you may want to consider.
• The loans are not for personal use, they are for business purposes only. Every dollar which is spent must be accounted for.
• Be sure to save all documents and receipts. This is important for when you are filing taxes for your business.

[phoebebuffay]

on 3/4/2009 Great advice. Thanks!

[phoebebuffay]

on 3/4/2009 Great tips! Thanks!

[cadosh]

on 2/26/2009 Thank you for writing this article, really good! 5*

[bewareboyz]

on 1/9/2009 Very well written article!!

[Sidhartha]

on 1/7/2009 Great info I'm actually thinking about starting my own business. This article will definetly help