HOW TO GET A BUSINESS LOAN

WHERE TO FIND THE MONEY YOU NEED!

Finding start-up capital for a new business can be the most difficult job an entrepreneur will undertake.

Most new businesses are started with initial capital coming from personal savings and other forms of personal equity. Look to private sources such as friends and family when starting your business venture. A friend or relative may lend you money with no interest, or low interest, which can be very beneficial when getting started.

Banks and credit unions are the most common source of funding. These entities provide financing if you can show a sound business plan and the ability to repay the loan. To be successful in obtaining a loan, be prepared and organized. Know exactly how much money you need, why you need it and how you intend to pay it back. Convince your lender that you are a good risk. Bankers dislike risk. Improper preparation may indicate to a lender that your loan could be high risk.

Approval of your loan request will depend on a number of variables. Improve your chances of obtaining a loan by preparing a written loan proposal. Your loan proposal should contain elements such as a comprehensive business plan, a statement indicating the purpose of the loan, list of collateral, cash flow projections and if it is an established business, a balance sheet and income statement for the previous three years. Also, be prepared to show your Federal Tax returns for the same period.

A well-written business plan will play a key role in the success of your business. In addition to being required to obtain certain loans, a carefully considered plan helps business owners focus on the strategic objectives and to communicate them to the staff.

For the inexperienced in creating a business plan, free assistance is available from us. Please give us a call @ 575-523-5627.