10 Steps for a Small Business Loan
Getting a small business loan can be tricky, especially if you have never tried to get one before. Luckily, there are ten steps you can take to make getting approved for a loan a little easier.
1. Research the Types of Small Business Loans
There are over a dozen types of small business loans. Some of which can be gotten through the Small Business Association. Make sure to do your research to find out which loan best fits your needs.
2. Pick the Best Lender for You
Will you get your loan from a bank, credit union, or online lender? Do your research to find out which of these will give you the best (lowest) interest rates.
3. Check on Your Credit Score
Check on both your personal credit score and your business’s credit score. The higher the credit score (for either type), the better the interest rates you are likely to get. Also, the more likely you will be to get approved for a small business loan.
4. Organize Your Financial Statements
You need to make sure that you have all of your financial statements in order before you will get approved for a loan. It is best to have both hard copies and digital files for this. Ask your lending institution as to how far back your records must go.
5. Gather Required Business Financial Forms and Information
Talk to your loan manager to find out what other documents you need to complete your loan application. Tax documents are the most common necessity, but other documents may also be required.
6. Make a Plan for Borrowing and Spending
Know going into a meeting how much money you need and how you plan on spending it. If possible, write up your plan. This will help you to look organized.
7. Collect Collateral (If Necessary)
If your loan requires it, make sure you have collateral. Business collateral can include anything of value from unpaid invoices to inventory, to real estate.
8. Review the Loan Terms
Make sure to review the terms of your loan before you sign the paperwork. Bring your accountant with you to make sure you understand everything.
9. Revamp Your Business’s Online Presence
To improve your chances of getting approved for a loan, make sure your business looks professional online. Give your website a new professional theme and make sure there are no unprofessional posts on your business’s social media account.
10. Continue to Keep Learning About Small Business Loans
While you are waiting for your loan to go through, keep researching loans. You can never know too much!
Try to do these steps in order, if possible. If you go through all ten of these steps, then getting approved for a small business loan should be smooth sailing for you.