Tuesday, July 31, 2012
How to Get a Business Loan – Even When Banks Are Tightening Their Purse Strings
It is inevitable that you will need to know how to get a business loan at some point in the life of your company. Whether it is to get your business off the ground, to expand an already successful company idea, or to update your current operation to be more effective, you will need to know how to get business loan to reach your goals.
How do you get a business loan?
Lenders will have a lengthy list of questions to consider before approving a business loan. The best way to get your small business loan approved at a reasonable loan rate is to be prepared to answer all questions as accurately and thoroughly as you possibly can and to know how to anticipate their questions as much as possible.
There are certain factors that are taken into consideration when a bank is checking the viability of a business loan request. These elements will not only determine whether or not you receive the loan outright, but will also determine what kind of loan rate you will receive.
Credit History – How it Can Change Whether or Not You Can Get a Business Loan
When you apply for a personal credit card or you take out a company card, you are impacting the credit history of your business. As a small business owner, your personal credit is taken into consideration with the same level of gravity as that of your business; especially if the reason for your loan is to start a business that has yet to make a profit.
Equity – Why it Will Make the Difference for Your Business Loan
Equity is a lender’s way of assessing how much of your personal income has been invested into your business already. A lender is far less likely to take on risk by issuing a small business loan to a borrower that has invested little to none of their own money.
Collateral – Who needs it for a Business Loan? You Do.
Collateral is what you can sell to repay the loan in the event your
business does not meet the projected repayment of your loan. Every loan program requires some kind of collateral before they are willing to consider issuing a business loan.
It is important that you know what you’re asking for. That means that you have done your research and are not asking for a large loan with a 15 year repayment plan when the loan will actually be invested in product which will be used up in 15 months. Know how to get a business loan by knowing what you are asking for.
What else to Know about Getting a Business Loan
Something else to know inside and out? Your business . No one knows your business better than you. Have a thorough and well thought out business plan that includes cash flow projections. Know the market for the service or product that you’re offering. If the market is saturated in your area, be prepared to answer how your offering exceeds the competition. Why do/will consumers come to you?
Banks want to know that your business is low risk. What this means is that there is an established demand for whatever it is that your company offers, and there is a higher than average likelihood that your business will be able to repay the loan with interest. Knowing these facts will help your lender feel more secure about approving your small business loan.
Still Feeling Unsure About How to Get a Business Loan?
Let eBusinessAppraisals assist you in getting a business loan with our LendingEdge service. LendingEdge is how eBusinessAppraisals.com helps businesses meet their business lending objectives. Our experts can assist you with the preparation and offer guidance as to navigation through the lending process. Our extensive lending network gives businesses access to an array of lending options that are difficult for business owners learning how to get a business loan to locate independently. Contact eBusinessAppraisals to learn more about our exclusive LendingEdge service.
To learn more about LendingEdge and how we can be of assistance with your business loan, contact us at 800-706-1322 or sign up here and one of our professionals will assist you. Improve your chances of getting your business loan approved with our step-by-step guide here .
Category: Personal Finance