Article Tags : finances . micro loans . Money . sba-backed loans . Small business . small business financing . small business loans
If you are starting up new business, being granted enough funds can make the difference between success and failure. There are a few different kinds of loans for small businesses that may suit you. SBA-backed loans are offered from private-sector lenders with funds that are guaranteed by the SBA. The SBA has no direct funds for lending, so it simply backs bank loans to small business owners. Micro loans range from between $5,000 to $35,000, money that is to be used for any business purposes. There may be slightly different criteria between different lenders, but here are six general tips for getting small business loans, SBA-backed loans, and micro loans.
Step 1. Be prepared when you approach the bank for a loan.
Your goal is to prove that your venture is low-risk. Bring documents with you like cash flow and finance projections, a cover letter, and your business statement along with your completed loan application.
Step 2. Anticipate the answers to important questions.
You will be asked: How much money do you need? How long do you need to pay it back? What will the loan be used for? How do you plan on repaying it? Do you have a backup plan if you are not approved? Prepare answers to all these questions.
Step 3. Do not be apologetic, but professional.
When you are starting up new business, you will need loans for small businesses, so do not act sorry about it. Boost your image by remaining positive and professional. If you have anything physical like business brochures, ads or the like, bring them with you to improve your appearance of proficiency.
Step 4. Never stretch the truth.
While broad, generic statements will not do, you cannot fib on the specific information you provide the lender with. Spend time researching before you approach a lender. If you cannot support what you say with solid data, do not say it.
Step 5. Be patient.
Allow the loan officer to ask all his questions regarding you starting up new business. Pushing for a quick decision may result in your rejection.
Keep trying lender after lender until you are approved. The first loan when you are starting up new business is the hardest one to obtain. Lenders are not venture capitalists willing to make high-risk loans for small businesses. If you are unsuccessful at being approved from the first bank you visit, keep trying. Get referrals from successful entrepreneur friends to help your chances of being approved. Please visit stepsto.com for more great business advice.