If you own a small business and are in need of some capital, one option is to take out a Small Business Administration loan. These loans are only available to small, locally owned businesses and are offered as a way to help business owners get their business off the ground or survive a slump. The problem is, not everyone who applies for an SBA loan gets one. Here are three tips to help ensure you get the loan you need.
1. Apply at several banks.
It's a common misconception that to take out an SBA loan, you apply through the SBA. The SBA does not actually grant the loans -- they just insure them. Basically, the SBA will pay the bank if you stop paying on the loan, which reduces the risk that the bank takes in lending to you. To apply for an SBA loan, you need to visit a bank. You increase your chances of getting the loan by applying to several banks, since each bank may have slightly different criteria they follow when deciding who to offer a loan. Most lenders who offer SBA loans advertise this service. You can also try contacting your local SBA for a list of lenders in your area.
2. Have a business plan in hand.
So many businesses operate without a business plan. If this is you, then you need to get a business plan in order before you visit a bank to apply for an SBA loan. It may not be a written requirement to apply for the loan, but you are almost certain to be denied a loan without a business plan since the bank won't have a good way to assess your business' potential growth, your place in the industry, and your financial position.
If you need help writing a business plan, reach out to your local SBA. Most employ individuals whose sole job is to help business owners write business plans.
3. Bring financial evidence.
Make sure you bring along some evidence of your business's financial state when applying for a loan. You will need to demonstrate that your business has cash flow and will be able to pay back the loan as agreed upon. You will also need to demonstrate that you have a history of paying bills on time. If your books are all caught up, this should not be a problem. You may just need to highlight a few numbers or fill in a few more blanks to make them presentable.
Follow the tips above, and you'll increase your chances of being approved for an SBA loan.Share
23 May 2018
As I see it, one problem with most budgeting programs is that they don't account for the "real life" factor. Anyone can tell you not to spend anything and to save everything, but when it comes to feeding your kids or dealing with a medical emergency, most budgets get thrown out the window. I realized that this was a problem, so I decided to start focusing on budgeting for real life. I decided to forget everything that I knew about budgeting and started working with a clean slate. This blog is all about budgeting for real life and knowing how to spend your money the smart way.