Getting A Small Business Loan

Let's say that you are excited, that you have the ideas, the desire and the plan ready to go for your new business. All that you need at this point is some money. Working with banks on small business loans can be easy or difficult. It really depends on how prepared you are.

Put yourself on the other side of the desk of the person you are about to ask for assistance. If someone asked you for a small business loan, you'd want to know exactly why he or she wanted the money and what the chances were that he or she would repay the loan in full and on time.

First, you will need to prove that you are worth the money that you are asking for. Your personal credit history is relevant, especially if your business does not have a long operating history.

Next, bring financial statements for your business. You'll need to show your business's financial health. They will need to know how much it's worth and how much money you are moving.

You will need a credit rating report. You establish a credit rating by buying things on credit and paying back the money you owe. Your loan repayment history plays a big part in establishing your rating.

Last of all, include bios of you and your partners, your track record, your strategies and advantages and why it would be advantageous for them to loan the money to you.

You have prepared your documentation and now it's time to walk in and discuss money. Since you'll have to share all of your personal and business financial information anyway, do it with somebody who already has this information.

Start with institutions that you already do business with. These places know your history and financial behavior and are more likely to give small business loans to those who have already demonstrated responsibly.

A large part of the bank's risk is uncertainty regarding loan repayment. If they can reduce uncertainty about you, you're in a better position. If you have your mortgage with a bank, I would start with that institution first.

Credit unions are another choice. Because these institutions are smaller, you may be able to talk directly with higher-level decision makers to plead your case.

A word of caution: a lender will often ask for your home as collateral and promise to streamline the loan even without a plan forecast. This is not in your best interest and I would strongly suggest to keep on looking in another direction.

Court helps people to learn about internet marketing. You can read more of his work by visiting http://courtneytuttle.com.