How to Get a Business Loan Without a Business Plan
Demonstrating expertise and strength of personal character may make a lender feel secure to approve a business loan without a business plan. Good credit scores, industry knowledge, plus letters from suppliers and letters of intent from prospective customers are helpful tools to include. Prepare to spend time building relationships with local lenders and networking with them to secure the best possible loan with the most favorable terms.
- Difficulty:
- Moderately Challenging
Instructions
Things You'll Need
- Business experience
- Industry knowledge
- Personal collateral
- Good credit
- Outline of the business vision
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Demonstrate a need the business will uniquely fill. Show the expertise available to meet the needs and demands of customers. Collect commitments or letters of intent from prospective customers. Prepare to show prospective lenders strength in four key areas they typically evaluate, according to the editorial staff of Entrepreneur magazine online in 60-Second Guide to Getting A Loan: previous business experience, ability to repay the loan, collateral and personal guarantee, and character.
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2
Attend a financing seminar from a local business development center, and get advice from local counselors, such as the Valley Economic Development Council in the Los Angeles area. Do an Internet search for "economic development centers" in local cities. Build relationships with local bankers.
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3
Check with the Small Business Administration (SBA) or a local business bank to determine if the business is located in a low-income to moderate-income area, or Housing and Urban Devfelopment (HUD) area. Apply for a SBA Community Express Loan Program available through participating local banks. Log on to the franchise registry, advises a summary from the Borrego Springs Bank website, if the business applying for the loan is a franchise.
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4
Speak with a local bank known for lending in the community about the SBA Express loan. Check to make sure the business meets requirements that are, according to U.S. Bank, "specifically designed for a growing small business that might not qualify for other loans." Read the description, which according to a summary on the U.S. Bank website, states that financing is available for working capital, equipment purchase, refinance, business purchase or leasehold improvements. Apply for financing, which ranges from $ 5,000 to $250,000.
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List available personal collateral and business-related collateral, such as equipment. Show a good credit history.
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Check with local business schools to see if faculty are available to advise on the matter. Register for a class related to securing a loan to have access to competent advice.
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Tips & Warnings
Expect to network
Know the business well
Know what the business offers uniquely
Do not borrow what cannot be repaid
