What you will need to get a small business loan
One of the biggest challenges that any small business faces, is getting the financing they need. Most often this type of financing comes in the form of a small business loan. The reality is that in this difficult lending environment, it often comes down to how well a business owner presents him or herself, as to whether they get the business loan they are seeking. This means that small business owners who make the effort to present themselves in the best possible way, and have the right documentation, are the ones who are most likely to leave the bank with a loan approval. There are specific tasks that can help you get the business loan that you are seeking. Here is what you will need to get a small business loan-
- A polished and well written business plan-One of the most important things that you will need is business plan. At one time it was stated that you wouldn't need a business plan, in order to get a business loan. This is patently untrue. Your potential lender will want to see that you have taken the time to write down your goals and plans, for your business. Your business plan should highlight what your business has to offer and make you a more appealing candidate, for your loan.
- A paper trail-Getting a startup loan and obtaining financing for an existing business are two different things. If your business is a startup it will be far harder to provide any paper trail (due to the fact that you haven't been in business), however, if you have been in business, you want to be able to show that you have had some success with your business goals. This can be done by showing that you have repaid a previous loan and have the ability to do so again.
- A personal and business credit report-One of the first things that you should do is obtain a copy of your personal and business credit report. You want to carefully go over them and make sure that there are no errors or inaccuracies. This can be a time consuming process so it is best to do this way in advance of your loan application. Do not overlook pulling your personal credit report as your lender will take into consideration how well you manage your personal finances, as a reflection of how well you will manage the finances of your business.
- A documentation of your industry experience-Lenders understand that they are not really investing in the products or services, of a particular business, but rather in the people who are running the company. You will need to clearly demonstrate that the people who are running your small business (yourself included) have the experience and expertise that is needed to grow your small business into a success. This documentation is often presented as part of the business plan, or can be given as a separate document. Either way you will need to clearly detail any experience that is relevant to your industry. In addition, you will need to be able to show successes that you have accomplished while you have owned and operated your present business, or other businesses. Do not be afraid to include any noteworthy achievements. Keep in mind that this will need to be done for every manager that works for you. Lenders will want to know about everyone who will play a part in whether or not your small business succeeds. Taking the time to give a potential lender this information can help you to build a more solid financial future, for your business.