Applying for a Small Business Loan
A Home Business Article Contributed by Sharon Hill
How to Apply for a Small Business Loan
Before you apply for a small business loan you need to know some how much money you need and what use you're going to make of the money. Determine what type of business loan you're going to want to apply for and from whom. Make a list of potential lenders, whether banks, credit unions, venture capitalists, small business administration or other sources.
Planning Ahead for Your Small Business Loan
With either a new or established business you'll want to be as prepared for a crisis or an unexpected timely opportunity by securing ahead of time, if you can, a line of credit with your bank. This will greatly speed up the process of infusing your company with additional capital that must be secured on short notice.
If you don't have it already (and, unless your firm is brand new, you should, ) create your financial statements - a balance sheet is crucial. You need to display assets and liabilities - and an income statement if you've already been in business long enough to warrant one.
New or established, you can still write projected income - what amount of earnings you anticipate and from where (if you have more than one product or service you can clarify which product or service might bring in which amounts. This is especially important when you are asking for money for a specific project.) You may also, depending on the amount of the loan request, need to show your tax returns and customer list.
Once you have a list of potential lenders you'll need to contact each for the loan application. While this can be done by e-mail or fax or snail mail it is sometimes best, especially if it's your bank and you're known, or at least if it's a firm that is local to your place of residence, you may do better by making an appointment and talking with them in person. You may get more helpful information - clues about how to secure a yes that you might not have gotten from a fax or web site.
It's a fact, with any type of request, that's it's just plain harder to say no to someone who's looking you in the eye. That's human nature. When you walk in the door, projecting a business-like but friendly nature, and reminding them by your very presence that you're their neighbor, that loan officer will want to see that your loan is okayed.
Additional Small Business Loan Details
If your firm is new, and you're a sole proprietor, or you do not have a sterling credit rating, expect to secure your loan with personal assets. Bring with you a list of those assets. Should you be turned down by two banks don't dismay. This is now your opportunity to approach the Small Business Administration to request a small business loan from them.
An attorney can be very helpful in completing the applications and facilitating the loan process. If you feel you can't afford a lawyer check with the state bar association or the SBA and see if there is any low-cost legal assistance available. SCORE (Service Corps of Retired Executives) is another excellent resource.
