Take These Steps To Get a Small Business Loan
You are a proud business owner and have worked hard for all you have. There are times, though, when you wish you had a little more cash on reserve. One of the ways you can help fund your business is with a small business loan through a traditional lender or other resources. Before you take off for your local branch, there are a few things you should do in advance to maximize your experience.
Get the Basics Down
There are certain elements you need to have at the ready when it comes time to sit down and apply for a small business loan. These include:
- Federal tax identification number
- Full legal name of the business (LLC, LTD, LP, etc.)
- Two to three years’ worth of financial statements including profit and loss balance sheets
- Business plan complete with business projections based on trends
- Business credit report
- The amount of money you need
If you are not sure of the amount, a loan officer can help. Taking all of your financials into account, the two of you can come up with the loan amount that will benefit you the most.
Know Your Business Credit Score
Your business has a credit score. While it’s calculated differently than a personal credit score, it still takes into account debts and income. If you already have a string of loans or credit cards, your business credit score may not be good enough to qualify for another loan. Be sure to bring your business account documentation with you to the bank. Have an accounting of all your debts and assets, as well as your business’ cash flow over the last year or more. A lender wants to see that giving you money will get your business back on track, not bail it out for it to fail in another year.
Provide the Names of Business Investors
How did you start your business? Chances are you didn’t do it with a small business loan if you’re considering one now. If you had help starting your business like with investors, then be sure to have their information at the ready for the loan officer to contact. Lenders like to see investors have provided capital in the past. It makes your business more appealing.
As a business owner, there are times when you need a cash infusion. Whatever the reason, a small business loan may be the solution to your cash flow problems. Having your financials in order in advance of a money shortage may help in getting qualified for the loan your business needs.
