Getting financial backing for your new business venture

When you are starting a business you will need to obtain some financial backing to get it up and going. Most small business owners use bank loans to get their business moving. You will need a lot of money to get everything going, from acquiring the building for your business to all of the equipment you need to get started. The largest amount of money you make will go straight to your payroll. The first thing you need to do is decide which type of business loan you want to obtain. There are several types of business loans to choose from:

• Start-up business loan
• Unsecured business loan
• Equipment financing loans
• Construction financing
• Business only loan

Depending upon the type of business loan you apply for, you may need to front some collateral. If you are a new business owner, you may need to use some of your personal collateral to obtain the loan. This may mean you will lose your home if your business goes under. Always be careful about the type of collateral you use and try to get your personal assets away from the business.

When you go to the bank, you will need to fill out a loan application. Before you head to the bank, speak with a few different banks to find out which ones have the best rates and which loan consultant you like the best. You will need to furnish them with some basic information so they can start processing the loan. This will include your personal information, including your name, social security number, date of birth, etc.

You must provide information about the business including the business name, tax ID number, phone number, address, etc. You must also provide the bank with the business declaration such as a sole proprietorship, LLC, or corporation. If you are a start-up, your personal credit history will be one of the deciding factors if you are eligible to receive the loan. If you have been in business for awhile, you will need to provide information about the income from the business over the past 2-5 years. The more information you can give the lender, the easier it will be to obtain your loan.

It is essential to have good credit history and to have a good business credit score. If you don't have good credit, wait a few months while you work on getting rid of errors or blemishes on your credit report. Knock off past due payments and get rid of small payments that you can pay in full. The higher your credit rating, the easier it is for the lender to process your application.

Provide information about the company assets. This includes things like the equipment you own, the furniture in the building, checking accounts, etc. You must also provide the bank with information about your monthly payment obligations. This list will include your credit card debt, tax payments, rent, utilities, and any other financial obligations you have.

Most banks will provide online applications for businesses, saving you a lot of time filling out paperwork in an office. You also can avoid paying upfront fees if you fill out the application online.

Once you submit all your information to the bank, a loan consultant will review everything and determine if you qualify for a business loan. Providing them with a copy of your business portfolio is another way to help get the loan approved.

If you are new to business loans, start small. Once you demonstrate your ability to properly use the funds and pay it back in a timely manner, you will be a good applicant and it will be easier to obtain financial backing in the future.