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Applying for a Business Loan What You Should Know
by
David Gass
SUMMARY:
Applying for a business loan is one thing that many entrepreneurs fear more than the alternative, having a business collapse because of things out of their control. In some cases they are so reluctant to go through the process that they |
Applying for a business loan is one thing that many entrepreneurs fear more than the alternative, having a business collapse because of things out of their control. In some cases they are so reluctant to go through the process that they end up going into personal bankruptcy in a failing attempt to keep their business alive.
Part of the reason for that trepidation is that they know that the banks or lending institutions will evaluate their business with a fine tooth comb before granting that much needed infusion of cash that a business loan can provide. But another reason is that they simply dont know how the system of getting and granting a business loan actually works and that there are resources available to help them successfully get through this process.
One of those resources is the Small Business Administration of the federal government. The Small Business Administration (SBA) is an agency whose mission is to maintain and strengthen the nations economy by aiding, counseling, assisting and protecting the interests of small businesses. SBA provides three small business loan programs and sets guidelines by which small businesses can qualify for these loans through approved financial institutions. They guarantee these loans so that the banks dont have to assume all of the risk and encourage lenders to provide more money more often to more small business owners and operators.
To qualify for a business loan under an SBA guarantee a business has to prove an ability to repay any monies provided as well as providing past proof that the principals of the business are both trustworthy and creditworthy. Once a company has met these requirements any number of banks or commercial lending institutions would be happy to provide an appropriate business loan to meet the needs of the enterprise.
The SBA website and their offices across the country also provide free counseling and advice to business owners seeking a business loan. Their main advice is to come to the table with the bank prepared to offer them complete disclosure about your business operations. This will include budgets and forecasts as well as the reasons and rationale as to why the business needs a business loan. It should also include letters of references from customers and suppliers that the business meets all of its financial obligations and that they are confident enough in the business to continue their on-going relationship.
Getting a business loan is not easy, but if it means the difference between business success and failure, it is well worth the effort. Getting a business loan may not be the most fun that an entrepreneur can have, but it is an essential part of doing business and should be given the attention and preparation it deserves.
Article Source: http://www.elrincondelantropologo.com/
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| About the Author |
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
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