If you are a small business and need extra finance to expand, you may consider a business loan. Apart from visiting a bank, a small business can also approach financial institutions, like credit unions, for assistance. Here are some tips that small business owners should consider when applying for a small business loan.
The reason for and the amount of the loan – For a small business to get a loan approved it is vital that they offer the lender a clear plan as to why they need the loan. Business owners should include a plan with projections on how the investment will increase revenue in the future. It is also essential to clarify how much of an investment is required and how it will be used in detail.
Speak to nonprofits and volunteer groups for help – It is a good idea to speak to professionals like nonprofit organizations, volunteer groups and retired business executives for advice on how best to use and settle a business loan.
Review your credit history and credit score – Small businesses are usually single owner establishments and therefore when taking a business loan, the owner’s personal credit history will be evaluated, thus request your credit report from reporting agencies well in advance.
Review your borrowing options – Speak to commercial banks before you look at large national commercial banks, as they may offer better interest rates.
Plan a presentation and make an appointment – Make an appointment with your lender and be prepared with your business plan and a mini presentation that include financials, spreadsheets, charts, and graphs.