How to Get a Million-Dollar Business Loan
Expect a great deal of scrutiny when applying for a million-dollar business loan. The bank or lending institution almost certainly will require collateral and must be convinced that you are a savvy businessperson with an outstanding track record. Required collateral could include the assets of the business as well as your personal guarantee. Some businesses, such as limited liability companies, are formed to protect the owners from debts incurred by the business. However, banks have the right to insist that the owners accept personal responsibility for the loan as a condition of approval.
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Instructions
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Write a new business plan or update your current plan. Ideally, your business should be established and profitable, with the million-dollar loan needed for further expansion and more profits. The business plan should offer detailed information about your product or service, along with audited financial information, if applicable. Financial projections, with and without the loan, should also be prepared. The financial information should include the projected opening-day balance for a new business, or financial statements for up to three years for an existing business. The plan should clearly detail how the financial projections will be met, including marketing, advertising and sales strategies.
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Gather additional information needed for the loan application. Examples include signed personal financial statements by the owners along with their resumes. Also offer documents showing the current level of financial investment in the company by the owners, and a history of the business.
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Make appointments with business loan officers at several banks around town, including your own bank. Take along a one- or two-page executive summary that covers the business, the owners, the success or anticipated success of the business and a reason for the loan. Discuss your business with the loan officer. Ask about the application process, including qualifications and collateral requirements. Also ask about terms and rates for the loan along with any special programs, such as loans backed by the U.S. Small Business Administration.
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Apply for a million-dollar loan at a local bank. Seek other sources if you are turned down, including online sites connecting entrepreneurs and investors (see Resources). Also, contact the Small Business Administration directly if you are having trouble getting a loan. Contact it by mail or by telephone (see Resources). The SBA does not directly issue loans but will answer general questions. Keep applying to various lenders until you are approved.
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References
Resources
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