The Entrepreneur’s Guide to Small Business Loans
The right funding can help you establish or grow your small business, so it is important to know how to get small business loans and other financing options. The three best pieces of advice when going after a loan are to be prepared, know your credit histories and defend yourself and your qualifications.
The first thing you should do when looking for small business loans is to be prepared. This means doing your research into the lending institutions, the financing options and even the loan terms available to you. This can give you a good idea of which underwriters you will be better off pitching to as well as what types of terms to expect if approved for the loan.
You will also need to be prepared with pertinent information about your company, your project and yourself if the underwriters ask. Whether you go into the meeting with all these facts in your head, or organized in an easy-to-access filing system, it is a good idea to know the answers to the questions before they are asked.
Know Your Credit Histories
Small business loans will rely on your business credit history as well as your personal one. This means that you will need to know what these scores and histories are before you go looking for a loan. There are three major reporting companies for private credit histories, Experian, TransUnion and Equifax, and three major ones for business credit histories, Experian, Dun & Bradstreet and Equifax. Knowing what your histories look like with each of these, on a personal and business level, can help you determine how likely you are to get that loan. Your histories will also help underwriters determine how likely you are to still be in business long enough to pay back the loan.
You know what you are trying to do, where your business stands now and what a loan can help you accomplish in the future. The underwriters will be trying to find any cracks in your plan to minimize their risk in loaning you the funds you need. This means that you will need to be ready and able to defend your qualifications as well as your project.
Small business loans can be the best way to expand or improve upon your business. They can also be a good way to get your company going if you know where to look and how to get one. You will want to be prepared to defend yourself, your company and your credit to the loan underwriters in order to be approved for the funding that you need.