How to Get a Small Business Loan
No matter if you’re running an existing business or you’re starting a new one, money presents the lifeline of any business. Therefore, you need to secure financing, especially if you’re a small business owner. Many business people find this task rather daunting and usually don’t know where to begin. We would like to help you with simple guide on how to get a small loan from a stable money lender.
In making small business loans, different lending institutions might have different standards. However, there are some criteria all of them look for when considering an application for a small business loan. First of all, the loan has to be for a sound business purpose. In general, this means the business should be eligible based on the use of loan proceeds, size and the nature of business itself (no gambling, pyramid sales, passive investment, lending etc.). Also, all partners involved in the business should have good business and personal credit history. It is also important to show you’re able to pay back the loan, which means reasonable collateral. However, if insufficient collateral is the only unfavorable factor, the request will probably be approved.
So, what are information and documents you need to get a loan? Even though different institutions require different documents (fewer or more), basically you’ll need business and personal credit history, as well as financial statements for start-up or existing business. Detailed, strong business plan which includes personal information of each partner will surely be required. Projected financial statements and cash flow projections for at least upcoming year are necessary, too.
Personally, you should be truthful, well prepared and thorough. Be careful when choosing lending institution. For example, a large bank will probably shy away from a small business loan, since it’s less profitable while taking the same amount of servicing and underwriting. Technically, large banks do make small loans, although the process is more difficult. In my opinion, one should always approach a lending institution they have worked with. Once you narrow down your options, talk to lending officers and ask about documentation requirements. When you get all the information and pick the stable money lender such as www.powerloans.com.sg, bring everything they asked for, since it’s the best way to avoid unnecessary hurdles and denial because of an incomplete application. Of course, before applying for a loan, it’s recommended to educate yourself regarding small business loans in order to understand the process itself and to be able to discuss it with your lending officer when the time comes.
Talking about securing financing, a start up is almost impossible venture. Nevertheless, if your business plan is strong, the credit sound and you have collateral to guarantee, many lending institution will consider your application. Start with smaller community financial institutions and credit unions, because larger banks would probably deny your application.
Before applying for a loan, make sure the money is only thing you need for a success. If that’s the case, I’m sure you’ll get the loan from almost any lending institution world wide.