You’ve got the ideas, the desire, and the plan. All you need is more money. Working with banks on small business loans can be easy or difficult, depending on how prepared you are. Follow this formula for obtaining small business loans and you can move on to the more important things.
In order to prove that you’re worth the money, you’ll want to prepare some documentation. First, your personal credit history is relevant to your small business loan – especially if your business does not have a long operating history. They will assume that you operate your business in the same way that you manage your personal finances. Bring your credit history with you to reference as necessary.
After you’ve prepared your documentation, it’s time to walk in and ask for the money. Where should you go for your small business loan? Since you’ll have to share all of your personal and business financial information anyway, do it with somebody who already has that information.
Start with institutions that you already do business with. These places know your history and financial behavior, and they’re more likely to give small business loans to those who’ve demonstrated financial responsibility. Remember, a big 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, that’s a good place to start asking about small business loans.
If you’re having a hard time getting approval for a small business loan, you may have to try some alternative sources. Don’t worry, this is often the case for smaller and newer businesses.
Brian Solomon is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To see more of his articles, please visit Brian Solomon’s columnist page.
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