How to get your business loan approved (with bank or SBA)

Getting your business loan approved (through bank or SBA) is an important part of start up that every potential entrepreneur faces in the initial stages. Many times, it is a difficult process because banks and lenders are very cautious about granting money to small business start ups. Fortunately, there are help that can get your business loans approved through the small business administration (SBA). This article talks about step by step of the process of getting your business loans approved.

Difficulty: Moderate

Instructions

1. The first step is to apply for a business start up loan at a local bank. All banks can lend money to potential entrepreneurs. This is risky business for the banks because many (90%) of the small businesses fail in the first year. They do not want to lose their money and evaluate the potential candidates very carefully.

2. You will have to prepare on your end before going to a local bank for business startup loan. Have a resume on hand that lists your education, experience and expertise. You will also need to bring the business plan that describes operation, cash flow and other essential functions. Banks will trust you more if you show them how much money you are putting into the business yourself. Promise of repayment is important to banks because they do not want to lose money; things that you own that are valuable (real estate, equipment, and inventory) can assure the bank that you have the ability for repayment.

3. Every bank has several loans for small business startup. Each has different conditions / terms that are beneficial for whatever you are trying to finance. For example, Bank of America has several small business loans (equipment loans, vehicle loans, real estate loans and etc). Make a phone call to your local bank and ask to speak to a business loan specialist. Set up an appointment with the person to discuss your options; remember to bring your documents (previous step) to convince the bank to lend you money. Dress appropriately for the meeting!

4. No matter how prepared you are for getting a loan, it can always be denied by the bank. It is risky business for banks and they have many reasons for denial. Fortunately, you have a good option here. The small business administration (SBA) has government based loans to help those that do not qualify for conventional bank loans. Ask your local loan specialist if the bank offers those programs. He or she will walk you through the process. These loans have a much higher approval rate than traditional bank loans.