Tips for Getting a Small Business Loan
Some questions the SBA recommends asking yourself before pursuing a small business loan are:
- Do you need more capital or can you manage existing cash flow more effectively?
- How do you define your need? Do you need money to expand or as a cushion against risk?
- How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money under pressure.
- How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives.
- In what state of development is your business? Needs are most critical during transitional stages.
- For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
- What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.
Getting to know your lender is also a great tip. If they know you, and trust you use that to your advantage. If a lender trusts you they may be more willing to set terms and conditions of the loan that won’t break your back. Researching is half the battle when it comes to small business loans. If you do your homework and have a good credit score, you will be on your way to attaining a loan.