A common question asked by small business owners is; “Who can get a small business loan?” The answer is fairly simple. As a small business owner you have access to credit, just like any other consumer. Loans are available from various sources and you must be creative in your approach to securing the funds needed for your start up.
The first thing to realize is that banks do not make loans to businesses. They make commercial loans. You must contact your local bank and inquire about applying for a small business loan. If you are qualified you can get the funds you need through a commercial loan. This will be an in home loan that is secured with property (your business).
Your second option is to get an unsubsidized loan from a private lender. In order to qualify you will need to prove you have an income. There are many private lenders that specialize in this type of loan for small businesses. However, you must meet the minimum income requirement in order to get an application approved. If you have poor credit this may not be an option for you.
Another way to get a loan is to use the resources available on the Internet. There are several websites that offer assistance for people who are having trouble getting a business loan. These sites often have resources for you to use in completing the application. You can learn about different options you have as well as what your credit score is and how to improve it before you apply for financing for your business venture.
Your last possible option is to work with a broker who specializes in working with small business loan lenders. Sometimes this is the best solution available for someone who has poor credit and needs a small business loan. The broker is familiar with the different lenders and banks that are available and understand the criteria that are used by the lenders to determine whether or not you will be approved for financing.
There are other types of personal finance options available if you cannot get approved for a small business loan. Personal loans can be used for many things including debt consolidation, home improvements and others. You should check with your local bank to see if there are any other options that they can provide for you.
The best thing to do if you are looking for someone to help you get a small business loan is to ask friends and family for references. Ask them how much money they have been able to borrow and what their experience has been. Also ask them how much they pay back each month on the loan and what it costs them. People you trust tend to give honest information. After gathering a few good referrals you should compare what you hear to the terms and conditions listed in the application.
Once you fill out the application and the lender receives your documents they will review the documents and make a decision. They will either approve you for financing or deny you access to the money you need. If you are denied access to the money you may have to reapply and this can be a lengthy process. The best thing you can do if you are denied is try again. Who knows, your next application may be approved and you may end up using this small business loan to start your business.
Once your application is denied, there are a number of things that you can do to appeal the decision. You can go back to the lender and tell them that you have been approved . . . . . . once again. You can explain to them that you have followed all the guidelines and that you are prepared to use the small business loan to launch your company. Explain to the lender why you were denied. Explain why you were not approved the first time and why now you have been approved.
You may also want to request an increase in your loan amount. Your lender may be willing to increase the amount that you borrow if you can show them that you intend on using the funds to run your business. For example, you need additional equipment or you may want to buy a new building. By proving these intentions you will be able to convince your lender that you will be using the money to do what it was intended for – run your business. By providing solid documentation, including a business plan, you will be able to get your lender to help you again.
If you are still not convinced about who can get a small business loan then try researching on the Internet. There are a number of online resources that can provide you with all of the answers that you are looking for. These resources will provide you with all of the information that you need to know in order to apply for the loan. You will even be able to apply for the loan without providing a business plan. However, if you provide a detailed description of your business you will likely meet with resistance, especially from lenders who require a good business plan to receive financing.