60-Second Guide to Getting A Loan

<b></b>

Getting a small business loan is not as easy as saying you have a great idea and holding out your hand. While it is difficult to get a start-up business loan without a proven track record, it's not impossible.

In just 60-seconds, we'll show you how to improve your odds for getting a small business loan.

0:60 Get Help Before You Start Bank Shopping
Community small business resources like SCORE and the Small Business Development Center (SBDC) can be invaluable when you are ready to seek funding for your business. Not only do they know the ins and outs of approaching lenders, having done it all before, they can steer you to the small business-friendly banks in your area to help tip the scales in your favor right from the beginning.

0:48 Know What Lenders Are Looking For
You've got to be prepared with the information your lender needs to make a decision in your favor. Lenders typically evaluate four key factors: previous business experience; ability to repay the loan; collateral and personal guarantee; and character. Prepare your documents thoroughly-they include your business plan, balance sheet, cash-flow statement, income statement, personal financial statements, personal and business tax returns, and a description of the terms and loan amount, including how it will be used, secured and repaid.

0:30 Give Them Your Business
Show your lender that you are a good risk. Move all of your personal and business accounts to the bank, so that they can evaluate how you manage your money. This will also give you a chance to check out the bank's loan policies and gather up the forms before you get started.

0:24 Bankers are People, Too
Get to know your bank's staff including the tellers, loan officers and other employees. Developing a personal relationship with your bank is essential not only to help you get a loan, but also if you should fall on hard times. Taking the time to get to know your bankers is an important ingredient in demonstrating your "character" to your lender.

0:18 Don't Go it Alone
After all of your research and preparation is completed, it's time to make your pitch. Be sure to practice your presentation and take one of your mentors with you, be it your SCORE business counselor or SBDC advocate. Either or both can be invaluable as you meet with your loan officer and negotiate the loan. And, your lender will feel more confident if you have a trusted community business leader with you.

0:03 When at First You Don't Succeed...
Many entrepreneurs get turned down for funding-some more than once before they succeed. But, don't give up. Meet again with your SCORE business counselor to discuss your strategy and talk with your banker about amending your approach. Meet with other banks until you find the right fit. In the end, banks want your business and will work with you to find a solution. The U.S. Small Business Administrationhas a variety of small business guaranteed loan programs that may fit your business. Be sure to check them out. And, above all, be persistent.

Brought to you by SSCORE "Counselors to America's Small Business"

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Business News

The Scam Artist Who Robbed Backstreet Boys and NSYNC Blind. 'Some of the Guys Couldn't Pay Their Car Payment.'

In the 1990s, Lou Pearlman made millions creating the Backstreet Boys and NSYNC. It was all a giant Ponzi scheme.

Business News

Google Gears Up to Compete With Microsoft-Backed ChatGPT — Here's What It Means

ChatGPT is building its user base faster than the most popular consumer apps created to date.

Thought Leaders

Why Investors Are Bullish on EdTech in 2023

EdTech enables educators to reach more students than ever before with the ability to deliver content beyond the limitations of a language barrier or timezone.

Business News

Frontier Airlines Just Announced Its All-You-Can-Fly Summer Pass for $399. What's the Catch?

As travel begins to pick up, the airline hopes unlimited travel will jumpstart its business.

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.