Getting a Business Loan
Before You Apply For That Business Loan...
The landscape certainly has changed for small businesses when it comes to getting a business loan.
What used to be green terrain has become pretty barren and bleak.
In fact, having access to capital is one of the biggest issues for small business today.
But the day is going to come when your business needs a loan and it doesn't have to be all doom and gloom.
Here are 6 things you need to prepare that will help with getting that business loan.
1.
Assemble your financial statements.
You need to familiarize yourself with your own company numbers so you can speak intelligently to a banker when applying for a business loan.
• You will need to show a banker your profit loss statement, your balance sheet and your statement of cash flows.
Your financial advisor, bookkeeper, or CPA can run these reports for you.
• Get your tax returns for the past 4 years from your CPA.
You need to show the bank how much money you have made over the past 4 years.
2.
Find a local banker and develop a solid relationship with him/her.
Get to know them and build goodwill with that person.
Even if you don't need a business loan right now, start the relationship now because it will help you down the road.
3.
Most banks will ask for collateral before giving you a business loan.
Be very careful putting your house up for collateral.
If you do, make sure it is a small percentage of your total home equity so it won't wipe you out if you can't pay back the loan.
4.
Do a credit check on yourself before applying for a loan.
You want to put your best foot forward.
So take steps to improve your personal credit score before applying for your business loan.
Visit 720creditscore (dot) com - this site can help you with this.
5.
Banks will not give you 100% of the money you need.
You will have to put in some money yourself or get it from friends or family.
Because of this, don't apply for the full amount that you need.
Show your bank that you are coming in with some on your own money.
6.
The biggest duh of all is that you have to show the bank how you are going to pay back the business loan.
It should be paid back from your cash flow.
The landscape certainly has changed for small businesses when it comes to getting a business loan.
What used to be green terrain has become pretty barren and bleak.
In fact, having access to capital is one of the biggest issues for small business today.
But the day is going to come when your business needs a loan and it doesn't have to be all doom and gloom.
Here are 6 things you need to prepare that will help with getting that business loan.
1.
Assemble your financial statements.
You need to familiarize yourself with your own company numbers so you can speak intelligently to a banker when applying for a business loan.
• You will need to show a banker your profit loss statement, your balance sheet and your statement of cash flows.
Your financial advisor, bookkeeper, or CPA can run these reports for you.
• Get your tax returns for the past 4 years from your CPA.
You need to show the bank how much money you have made over the past 4 years.
2.
Find a local banker and develop a solid relationship with him/her.
Get to know them and build goodwill with that person.
Even if you don't need a business loan right now, start the relationship now because it will help you down the road.
3.
Most banks will ask for collateral before giving you a business loan.
Be very careful putting your house up for collateral.
If you do, make sure it is a small percentage of your total home equity so it won't wipe you out if you can't pay back the loan.
4.
Do a credit check on yourself before applying for a loan.
You want to put your best foot forward.
So take steps to improve your personal credit score before applying for your business loan.
Visit 720creditscore (dot) com - this site can help you with this.
5.
Banks will not give you 100% of the money you need.
You will have to put in some money yourself or get it from friends or family.
Because of this, don't apply for the full amount that you need.
Show your bank that you are coming in with some on your own money.
6.
The biggest duh of all is that you have to show the bank how you are going to pay back the business loan.
It should be paid back from your cash flow.