SBA Loans: Tricks of the Trade To Securing Your Loan
Securing a loan for your business does not have to be scary. Lenders have options for a multitude of programs, whether you are just starting or need a little extra cash to get through a slump. The Small Business Association, or SBA, is a government entity that was created to assist small businesses. While it does not directly fund small business loans, it does help owners secure them. If you are in the market for some assistance securing the money you need, there are a few pointers that may help.
Have a Plan
If you are just starting, your business plan is a critical component of the process. In it, you should have detailed every facet of your business from the ground up. Lenders are very interested in your projected budget and operating expenses, foreseen expenses such as equipment and payroll as well as the time estimate for your business to start moving towards profits. You should have specific contacts for inventory, potential clients and lease options. If lenders believe your business plan is well-written and plausible in the current market, they are more likely to push you through to funding. However, if your plan falls flat or is not based on any real-world research, it will wind up costing you.
Work With Who You Know
It is likely you already have a working relationship with a bank or lender due to your mortgage or financial holdings. Speak with someone at your local branch about the options and programs they have for small business loans. The SBA has a list of financial institutions they have a strong relationship with. See if your bank made the cut. If not, go with another lender off the list. Also, do not be too upset if you get turned down at the first place you go to. Each lender has its own way of doing things, including parameters for loan approvals. Continue forward and find another name on the list.
Invest In Yourself
Lenders want assurances that you are taking this venture seriously; therefore, they are very interested in how much of your own money is invested. If you have not spent a dime, banks may believe you are not confident in the business. Conversely, if you have put up all your assets into the business thus far, lenders may be impressed enough to push you through.
Small business loans may seem impossible if you read some of the literature out there. With the right frame of mind, business plan and lender, you will get your shot at opening your own business. Remember, the SBA has been around for over half a century helping people just like you. Their success rate in this current climate is a testament to how important being prepared and confident is.