How to Get a Small Business Loan

Whether it’s to cover the cost of starting up a new business or expanding an old one, knowing how to get a small business loan is crucial. This article will provide tips on how to get one.

Tip#1: Be prepared. According to some sources a confident and prepared borrower is four times more likely to get a loan approved than one who doesn’t have answers for questions the lender asks. Likely questions are: How much money do you need? How long will you need the loan? What will you do if you are turned down?

Tip #2: Accentuate the positive. A positive, can-do attitude means a lot when you are trying to get a loan for your small business. Present yourself as someone who can and will repay the loan. This is an often overlooked step.

Tip #3: Dress for success. Wear appropriate business attire. Look neat and well-groomed. This will have more bearing than you might realize on getting a loan.

Tip #4: Be truthful. First off, it’s against the law to get a small business loan using false information. Presenting a complete and truthful picture of yourself increases the chances that you will succeed in getting a loan than pretending to be something you are not.

Tip #5: Bring along a copy of your business plan. This will provide the lender with some assurance that you know the steps involved in running a business.

Tip #6: Bring a set of cash flow projections. These estimate monies in and out of your business over a fixed period. They give lenders concrete financial data on the risk involved in extending the loan.

Tip #7: In advance, make a list of any real property or goods you own that could serve as collateral. Don’t forget any securities, such as stocks, or other investments you own.

Tip #8: Be ready to say how much of your own money you’re willing to invest in the business. Being willing to risk your own money shows the lender you’re committed to the enterprise. It tells them you’re worthy of getting a small business loan.

Tip #9: Be ready to show in what ways you are an expert in your chosen field. Details of your background, your business expertise, and even your aspirations can be make-or-break details in terms of how to get a loan.

Tip #10: When deciding on a potential lender, consider starting with institutions you already do business with. The bank you use is a good starting point. Your bank knows your history and financial behavior. Established customers are more likely to get a loan than someone walking in off the street for the first time.

Tip #11: Have a backup plan in mind in case your bank turns you down. What are other places where you can turn to get a loan? These include peer-to-peer lenders, such as family and friends. Another source from which to get a small business loan are dedicated lenders.  Included are traditional lending companies and online lenders such as Lending Tree. Just make sure the company from where you get your loan is reputable.  As you can see, there are quite a few tips on how to get a small business loan, and as long as you follow most of them, the probability of being granted the money you need is much, much higher.