I recently seen an ade on TV about getting a small buisness loan, thought I would do some more research on that:
Requirements for Small Business Loans
The requirements for a small business loan can seem overwhelming when you are thinking about applying for one, but this actually prepares you to keep business documentation long term. There are many requirements for a small business loan. Not having any one of these requirements could affect your chances of receiving the small business loan.
Requirements:
Personal financial statements
Purpose of the loan
History of the business
Business financial statements (existing business for 3 years)
Projected opening day balance sheet (new business)
Cash flow and expenses
Business plan
Business experience
Personal resume
Aging of accounts receivable and payable (existing business)
Collateral offered to secure the loan
Purpose of the loan
History of the business
Business financial statements (existing business for 3 years)
Projected opening day balance sheet (new business)
Cash flow and expenses
Business plan
Business experience
Personal resume
Aging of accounts receivable and payable (existing business)
Collateral offered to secure the loan
Function
- A small business loan can be used to purchase equipment, expand an office, or purchase furniture or machinery, and it can even be used as working capital. Small businesses often need so much that it seems like an uphill battle when it comes to finances. A small business loan can provide a breather to allow the business owner to flow creatively.
Considerations
- When applying for a small business loan, the business owner should realize that the loan approval may require that your business has good business credit score. Therefore, check your business credit score before you apply for a small business loan. You can check your business credit score through Experian Business Credit Reports or even Dun and Bradstreet.
Risk Factors
- Just like purchasing a house, it is important to know what the lender's approval appoints are before applying for a small business loan. Additionally, if too many lenders check the small business owner's personal credit and business credit, then a lender may not approve the small business loan application because so many others checked before them. Keep in mind that you should not wait until the last minute to find out what appears on the business credit report. Educate yourself on all the requirements of a small business loan, the various types of small business loans, and the different lenders offering small business loans.
Benefits
- The benefits of a small business loan are many. One of the main ones is that a small business loan can allow the small business owner to grow the business without the financial pressure of acquiring customers immediately. Working capital gives a small business owner the chance to work the business plan without the financial pressure and stress of a shot-gun approach to marketing to get any clients versus the business's defined targets.
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