If you have a small business, or are looking to start one, you will probably need additional funding at some point or another. You can either seek out funding through venture capital or from a loan. Venture capital has the advantage of not having to worry about interest or repayment (directly), but has the obvious disadvantage that you must give up partial ownership of your company. If you are not comfortable with giving up ownership, your other option is to get a loan. We will be discussing how to get a small business loan in today’s discussion.
A small business loan is just like any other business loan with special consideration given to the size and relative newness of your company. To this end the restrictions on required revenue and credit score are more lenient. This has some implications on the interest rates and conditions you can get your loan under, and as such it’s important to understand how best to source it.
The small business administration of America is a great resource if you are looking for information on how to borrow money for your small business. They provide two services which are both very helpful to that end. The first is business plan assistance. Having a good business plan is critical to your chances of getting funding, and to the success of your business. It is important to understand that this document is not simply a general outline. It should have detailed information about your projected costs and profits. The idea here is to include anything and everything that is relevant to the future of your company. Not only will this give a clear picture to others, but it will likely show you where your own thinking has been flawed. The other service that the small business administration provides is to help to line you up with loan providers. Different providers will have different criteria, and the SBA can help you find a good match for your personal circumstances. This can save you a great deal of time and headache as you look to get the money for your company.
When looking to get a loan, make sure to seek out funding designed specifically for small businesses. Create a well organized and detailed business plan, with the help of the SBA if possible if you desire. Also if you don’t know how to find a good lender for you, try asking your local SBA office to see if they can assist you.