How to Get Business Loans

Whether you need money to start a business or funds to keep your existing business afloat, business loans can help. Several financial institutions offer business loans (credit unions and banks). However, lenders have tight lending requirements, and not everyone qualifies for a loan. Before applying for a business loan, it's best to familiarize yourself with a lender's loan requirements and do everything in your power to meet their requirements.

Things You'll Need

• Credit report
• Financial history
• Business plan
• Collateral

Instructions

1. Improve your personal credit score. Often, lenders use your personal credit score to determine whether you qualify for a business loan. Order a copy of your report and score from the Annual Credit Report website. Review your report and look for errors. If necessary, take steps to improve a low score (pay bills on time and reduce debts).

2. Gather your financial statements. Aside from your credit score, your financial history determines your loan eligibility. If you have an established business, present copies of your business tax returns for the past two years. If you're starting a new business, bring copies of your personal income statements (tax returns, bank statements or W-2 tax forms) and a list of your debts and assets.

3. Create a business plan. A business plan states your goals for the business and outlines how you plan to achieve this goal. Before approving a request for a business loan, some lenders prefer to see a business plan. Hire a professional business plan writer or create your own plan.

4. Use collateral. Secured business loans are easier to obtain because your collateral secures the loan. The value of your collateral must correspond to the loan amount. Acceptable collateral includes a vehicle title, jewelry or other valuable personal property.

5. Compare loan rates. Lenders vary, and they charge varying interest rates. Prior to choosing a lender, visit a broker site and compare business loan rates. Request a free loan quote, and pick the lender with the best loan package

Resources

• Lending Tree - Compare Busines Loan Rates
• Annual Credit Report - Order a Copy of Your Credit Report
• SBA - Business Plan Tutorial