These days, acquiring a small business loan can be a painful process. But, the process can be made much easier by simply preparing yourself for what lies ahead.
Given the presence of the ultimate resource, the Internet, today’s business owners have no excuse but to be prepared when it comes to applying for a small business loan. The following steps are designed less to be followed and more merely considered before embarking on the application process.
Perhaps the first thing to consider is your business plan or strategy, and how solid it is. It is essential that you are familiar with the plan and can present it to potential lenders comfortably. The plan should include your record of profitability, budget and cash flow, as well as a five year plan that outlines your future objectives. Detail is key, and banks or other lenders will often want to see exactly how their money will be put to use.
Secondly, it is important to give yourself several financing options, whether that be a handful of banks or other lending institutions. The same level of preparation should be maintained when applying for a loan from all of these sources. Be prepared to visit several places, and continue to look around even should you get approved for a loan. This will help you find the best possible deal, but still have one to fall back on.
There are also other financing options, such as the SBA (Small Business Association) and Peer-to-Peer lenders. The SBA is an excellent resource, and even when not facilitating a loan will be able to offer you advice and assistance when it comes to applying for a loan.
Finally, it is important to adopt a measured approach between thinking big but asking small. You may be a business owner with grand dreams, but everyone has to start somewhere. Begin by looking at the local lenders around you; these will often be more sympathetic to your situation. And consider that larger requests are less likely to get approved than smaller ones, so begin by asking for just enough to cover your expenses and go from there.