Applying for a small business loan is the best thing you can do to start on your way to achieving your entrepreneurial dreams.
Banks are still keeping their credit tight, and have been giving out fewer loans every month than they did a decade ago. The good news is that the government and many lending institutions are on the side of small businesses, and many initiatives have been launched in recent years to help entrepreneurs increase borrowing possibilities. Since the process is so lengthy and complicated, make sure to prepare a lot beforehand. Here’s what to do:
1. Double-Check Your Credit History
Little things like a misspelled address, or a purchase from a store that you don’t remember making, could potentially indicate the presence of fraud. Any discrepancies are worth taking note of, so comb through your credit report with a keen eye, paying attention to all the details. Late payments are sometimes reported for payments that were actually paid on time, and this happens more than you think.
2. Write a Business Plan
A carefully written business plan can go a very long way in making your application a killer one. Take the opportunity to brag a little about your business experiences, and be sure to include your qualifications so that lending institutions can see you are serious. The plan must also include financial information, such as expenses and projections, and exactly how much money you need to fund your business. Don’t forget market analyses, too—you need to prove that you understand the industry you’re heading into.
3. Offer Collateral
It’s generally wise to offer collateral. This helps banks breathe a little easier because they like to know they aren’t the only ones taking a risk in lending you money. Create a collateral document that outlines the assets you can offer up as collateral. Things like houses, cars, expensive paintings, and even rare jewelry can all be used for this purpose.
Biz2Credit (www.biz2credit.com) can help you figure out the best path to take. Visit the website or call (800) 200-5678 for help.