How to Get a Business Loan From a Bank
Whether just starting up or looking to expand, there will be a time when you need a commercial loan for your business. This will be easier if your business is already established, since you'll be able to provide the bank with financial statements and a business credit score. However, you can still get a business loan from a bank to start up a company, provided you have good personal credit. Walk into the bank confident and prepared in order to get the loan.
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Instructions
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Decide how much you need and what you'll use it for. Don't just pick an arbitrary amount. If you want to buy equipment, research how much it costs so that you know how much to ask for. If you're looking to expand your business, document all the costs associated with that. The bank will want to know how you're going to spend its money.
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Prepare your financial statements. This includes past tax returns, which show how much money your business has made, and any other documents that support your current cash flow. If your business is not yet established, you'll want to bring along your personal returns.
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Make an appointment with the small business loan officer at your local bank. Most banks will have someone that specializes in small business loans.
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Bring your application and all supporting documents to the meeting. Download the application from the bank's website prior to your meeting and make sure you've accurately filled it out. The loan officer will want the aforementioned plan of spending, financial statements, a business plan and the application.
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Offer some form of collateral. When banks give a loan, they take a risk that you won't pay the loan back. You can alleviate the bank's worry by providing some type of collateral. For example, if you are getting a commercial real estate loan, the building is the collateral.
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Tips & Warnings
SBA loans are business loans that are backed by the Small Business Administration. They have lower interest rates, so this type of loan should be your first choice.
If you get turned down for a business loan, you may still qualify for a personal loan. You can then use the money to support your business.
References
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