Taking up a small business loan request to boost your business or other jobs has been one of the things that every business man has in mind. There are many business out there but low capital or none to start up such business.
There are many graduates and people out there with that business idea but they want a little capital to set it up.
I will be frank with you, there are some countries out there that graduates cry every day because of lack of jobs.
So what do you do if you find yourself in such a situation? How do you plan yourself to get or open up a business that can really be beneficial tomorrow.
Every man wants to go home everyday or at the end of the month with smiles and happiness on their mind because the business really paid out.
This post gives you in a nutshell the basic information on how to go for a loan to be able to start that business of your choice.
However, before you start applying for a business loan, make sure you know the business you want and you also have a business plan.
Smart Asked Questions About the Business Loans
I know some of these questions might be popping out of your heads or mind ever since on the loan issue.
Is it possible to get the loan? Then how do I get this loan for my business?
Yes this is possible, acquiring loans are very much possible but I must to tell you that it is not easy. However, there is no harm in trying. You can try it out today.
Therefore, you have to know the lender’s requirement before you apply for this loan. Each financial institution and lenders have their own application requirements. Some gets theirs through online lenders or micro lenders.
If I am requesting a loan from the bank, how do I do that?
I guess you already know a bank and how they are capable to meet up with things like funds and loan disbursement.
Just like I said, they too have their requirements which you must meet up wit before securing the loan. Bank or credit unions are quite different from online lenders.
Banks also allows you to have a loan officer who you can meet directly as the application process begins. He as well will be able to guide you through the process.
Applying with low credit, can I get the loans?
This is what makes some banks reject such loans and probably will not approve it because you do not meet up with requirements
If you have a bad credit, it seems to be difficult but here the LENDERS comes in to help out but obviously with a high percentage or interest rates.
How long will it take the loan to be approved?
Well, this is not a constant even but loan approval on small business request will take a few weeks to months depending on the lender.
Just know that you do not need to rush for the money quickly, it is for growing the business and not you basic salary.
Therefore, let us look at what the small business loan looks like-
Definition of a Small Business Loan Request
Defining unto the layman’s level: small business loan is a request for a finance or money to an entrepreneur mainly for the purpose of growing a business from the small scale.
Depending on the credit institutions, banks and lenders, small business loan price varies and can be in any currency.
Still on the same note, in united states, the small business loan agency available is U.S Small Business Administration (SBA).
SOME FEATURES OF THE S.B.A
They are administration working through financial institutions.
They offer or guarantees loans to entrepreneur (range in value of loans).
Helps to reduce risk for other lending institutions if the person borrowing money defaults.
They are among the affordable funding institution with low interest rates.
They take from few weeks to months before approval of loan.
Documents You will Need When Applying for the Small Business Loan Request
Below are few documents you will really need when applying for the loan but remember the credit union or lender can even request for more.
- A business plan.
- Two or three years financial statements.
- A business banking statement.
- Collateral: maybe land etc.
- Tax returns like business tax.
- Your business licence.
- 3 months back of bank statement.
- A legal document for any physical asset you have.
Simple Basic Steps on How to Apply for the Small Loan Request
BELOW ARE THE FEW STEPS TO FOLLOW:
- You credit and business profile-
Just like I said before, it will be nice for you as a borrower to maintain a good credit profile because it will serve as back bone for requesting the loan.
The credit profile shows how worthy you can be towards maintain finances that comes into the account.
Therefore, it will be nice to try and maintain a good credit score as you apply for the loan.
- Write your business plan before applying for any loan
This is something you should already have with you but if you have not done that then you should start doing them right now.
Many credit unions, banks and SBA would like to see these business plan.
Therefore, you business plan should talk about the business you want to venture into, financial records, funding and how you plan to use the money.
You have to give a good details about the business in the plan because the lender will see the worth and why you need the money.
- SCORE OR SBDC: Locate this office in the states and visit them as well because they can really help out with loans for small business. They won’t cost you anything to do that. SCORE OR SBDC are good in helping small business holders. They are business professionals and has a lot to offer to entrepreneur out there.
- Know the type of loan you are going for-
There are kinds of loan or loan terms so you should know the one that fits you.
- The short term and long term loans: they are loans you can pay within short period and long term period respectively.
- B.A loan: they are not lenders but work through financial institution and offers loans to people for business.
- Line of credit: here you can access the loan or cash when you need it, pay it off, and use it again during the term of credit line. More good than a traditional loan.
- Merchant cash advance: operates and works on an advance on your credit and debit card sales but cost of financing is very high.
- Micro loans: just like the name goes, it operates and issues small finances to entrepreneur. The loans are small.
- You should know the type of lender that suits your need: banks and credit unions,online lenders, microlenders.
- submission level: once you get many of the documents and you know a little about how some lending institution works, you can submit the application and wait for feedback. Read documents carefully.