How to Become a Small Business Loan Consultant

A small business loan consultant can have an interesting and lucrative career if the practitioner develops a solid knowledge base, thoroughly understands how smaller commercial loans work, becomes adept at analyzing basic financial statements, and recommends solutions that help clients first instead of just the consultant’s bank account. A small business loan consultant is a classic example of the phrase, “Do what you love and the money will follow.”

Instructions

1. Gather all the information possible about commercial loans that are available to small businesses. Knowledge is power. A variety of loans and lenders are marketed to smaller businesses with rates and terms often targeted to one industry or another.

2. Become very familiar with Small Business Administration (SBA) loans and the requirements to get one. Many smaller businesses do not qualify for classic commercial loans. SBA, created to help small business, offers guarantees up to 85 percent of principal to qualified banks and credit unions that will lend to smaller companies. SBA loans are critical to the success of smaller companies and small business loan consultants.

3. Learn how to analyze profit and loss statements, balance sheets and cash flow statements. An effective small business loan consultant can evaluate these statements and recommend the best financing product based on a company's current health and future prospects.

4. Learn how to prepare effective business plans and read and evaluate existing plans. For start up companies and those operating entities needing additional financing, effective business plans must normally be submitted to lenders for their examination.

5. Establish relationships with some legitimate sources of small business and SBA loans, including banks, credit unions and private lenders. Becoming a source for commercial loans builds credibility and the consultant's bank balance, from the income earned by referring new commercial loans.

6. Establish an appropriate office and/or effective website to market small business advice and loans. Use your personal and professional networks to spread the word and be ready to dispense useful knowledge for a reasonable fee.

Tips & Warnings

• Maintain good communication with your lending sources because, unlike home mortgage companies, commercial lenders become more or less aggressive depending on their “appetite” for new business loans. Small business consultants must know which lenders are offering the most favorable terms.

• Become proficient in fast calculations for monthly payments on prospective loan amounts.

• Be tactful when looking at start up ideas for companies. Many would be entrepreneurs are inexperienced in financial and accounting areas. They may be challenged when expressing their plans, projections, and financial needs. Do not assume their ideas or plans are not effective just because they lack polish in presentation. Remember, that is why they came to you in the first place.

Resources

• More about what clients expect from a small business loan consultant