How To Get a Small Business Loan
Buying a new asset for your small business can be a tough thing to budget, but that’s why there are a lot of financial instruments designed to help you meet your needs. If you’re looking for a business loan to cover a new acquisition like facilities or equipment, your needs will likely run to more traditional, long-term options than when you’re managing cash flow or raising a temporary pile of working capital. There are a few places to go for those loans, and most business owners will immediately think of credit unions and banks. It’s also a good idea to look at your options through the SBA. Not only can you often find better rates, you still might be able to apply with the lender you would have used for a regular loan if they participate in the Small Business Administration’s 504 or 7a programs.
You can also look online for other business loan providers. Many of them are also participants in the SBA loan programs, and some also offer loans with shorter terms for businesses that need them. Weigh all your options to determine the most cost-effective choice that doesn’t take your monthly overhead over your ideal limits. Once you have a shortlist, it’s time to apply.
Applying for a Loan
SBA loans through regular program participants can take a little while to approve since both the lender and the administration need to approve them. If you want to speed things up by applying with more than one lender, you need to make sure they are all preferred participants in the SBA’s programs. The difference between regular and preferred participants? Preferred lenders can approve the SBA side of the agreement themselves. This speeds up the process and avoids double-submitting the same loan proposal to the SBA itself.
It’s also a good idea to apply at the outside programs you found, to compare offers. If you’re not looking at an SBA loan, make sure you’re applying to several other lenders at once to increase your chances of a speedy approval. Applications need to be completed in full, with an included business plan and financial disclosures. Some lenders will also require other paperwork, so check individual instructions with each lender for their application package requirements.
Get Your Loan With a Winning Business Plan
The business plan is probably the most important part of the application package. It’s your chance to put your finances and business growth projections on the table with an explanation of both how your operation is working and how the loan will enable it to grow more. The key is having a complete and frank discussion of your current key staff and operations capacity, along with sober projections about the potential gains from the loan. Be detailed and organized, show the lender what you can do with the capital, and increase your odds of getting approved quickly for your business loan.
