Secrets of the Small Business Loan: An Inside Look
As a small business owner, you know that it takes a lot of hard work to keep your business running. At any given time, there are several different tasks that must be managed to ensure your business is running as smoothly as possible, many of which will require adequate funding. Small business loans can help fulfill this necessary demand and keep your business funded so that you can focus on keeping your business running.
However, small business loans are not easily obtained. Both you and your business will be stringently examined to help the bank determine if your business is worth investing in. By being prepared for the bank’s inquiries with thought out and well-documented answers, you will stand the best chance of securing a loan. Here are three main areas of information that you should make sure to be well-versed in.
Your Credit History
As mentioned above, it won’t just be your business that will be under scrutiny. Your own credit history will very likely be examined. Make sure you know what your credit reports say by going over them yourself, looking for outdated or incorrect items. If anything is incorrect, call the agency to have it amended. If there are negative hits on your credit reports, be prepared to explain how you got to that point, as well as how you are working to overcome it.
While important, your business’s and your own credit history aren’t the sole determining factors in whether or not you will be granted a loan. Your education and success in business thus far will also demonstrate your worthiness for investing in. If you don’t have formal training, seek out a seminar or two to add to your resume. Be prepared to explain how your educational and business experiences have prepared you to succeed in business in the future.
Your Ability to Repay the Loan
In the end, every question a loan officer asks is leading up to this question. Having a list of reasons and examples as to how you will be able to make regular payments on a loan, as well as providing expected business trajectories will prove that you have a solid plan for growing your business and can be trusted to make good on the loan you’ve been awarded.
Small business loans can help a small business stay successful, but they’re only earned with careful preparation. Paying attention to the above areas can help you secure a loan for your business.