A small business loan is a possibility for a new entrepreneur to open a business. This type of loan is not protected by the government like SBA loans, so the requirements are less strict.
The first step is looking for a good lender. Considering the type of a loan you want to get, you may find different terms and conditions. For applying, you will be asked to fill in the application form.
You will have to provide your credit score and a business plan. It’s important to show the effectiveness of your idea and your ability to describe it to attract lenders to invest money.
In 2017 statistic from the Small Business Administration (SBA) said that compared with the last years’ fewer business owners (40%) applied for the business loans, but the approval rates were higher. The overall sum of the borrowed money is around $600 billion, though more than half of all the applicants applied for business loans in the amount of $100,000 or less.
Basic Application Requirement
Very often the business owners have to explain how much they need and how they calculated that sum. To avoid questions that may prevent from getting a business loan:
- One has to make sure that he included a financial statement in the business plan.
- The business plan has to be compelling, supported with presentation, graphs, spreadsheets if necessary.
- It is recommended to prepare an Executive Summary, which is summarizing the key points of the business plan and saves time for the readers – loan lenders.
Moreover, those business owners, whose companies are start-ups or exist less than three years, need to know that their personal credit history will be considered as well as the business credit history. After preparing and sending all the necessary documents to the prospective lender, one has to wait for the decision. If your application is approved, a lender will offer you a definite interest rate.
Today there are a lot of online services that offer various business loans. You can also apply for a traditional loan, but its’ requirements are often more strict. For detailed information and professional help turn to Personal Money Service Company.
By the way, read about loans for young entrepreneurs to understand the process better.