How to Get a Small Business Loan
By dragon on Jan 9, 2008 in Finance
Whether it’s to fund your start-up or help smooth over a rough period, most small businesses have to take out a small business loan at one time or another. Here are a few tips for getting a loan as quickly and painlessly as possible.
Be prepared to show your business plan. Before financing your small business, most lenders and investors will want to see your business plan. This is necessary for established businesses as well as start-ups, as your business plan offers a way for lenders and investors to evaluate your business. They don’t want to finance a small business operation that is doomed to failure, after all!
Provide cash flow projections and any past tax returns. Documents such as these demonstrate that you will be able to pay back their small business loans, or that the investor will see a return from their investment. Small businesses already in existence can demonstrate income history with past years’ tax returns, and all businesses – whether new or established – can provide cash flow projections to show that they are reasonably confident their business will succeed.
If you don’t want to get out a loan, or want to minimize the amount you take out, see how you can reduce your expenses (and therefore your need for financing). For example, if your business is a start up, you could find an equipment lease program instead of buying all of the equipment outright. If you can’t minimize your expenses, though, don’t worry – there is no shame in taking out a small business loan.
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