How to Get a Small Business Loan: 9 Steps - MakeSureHow
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Being a businessman is not easy. In addition to so many techniques, money is the most important aspect for opening a business. The following steps will give you a clear picture of how to get a small business loan.

Steps

  1. 1
    Check your credit report - Your credit report plays a very crucial role in the approval or rejection of your loan. This ensures your financial stability and your financial responsibility. Obtain your credit report and see if it is up to the mark or not.
  2. 2
    Collect your financial statements- These documents are important to show that you are capable of converting the loans that you are taking, into profits. Only when you are able to show that will the loan providers give you loan. These financial statements include balanced sheet, net worth, income statement and current financial statement. Details of all these can be taken from the bank you are taking the loan from.
  3. 3
    Prepare a sheet of your future plans- This gives a clear picture of your future business operations. These plans also provide the lenders a satisfaction and surety of your being able to repay the loans in future. These plans should not be haphazard or irrational. They should be extremely structured and business oriented. Only then will they provide a positive picture of your business.
  4. 4
    Talk to the bank representative- Every bank has a different requirement for the loan that they provide. Apart from the common documents such as identity proofs and residence proofs, they also have their own specific requirements. Therefore, it is always advisable to visit the bank and get their first hand information.
  5. 5
    Prepare your executive summary- This includes the details of your business- its background, purpose, future plans, targets and present status. In addition to this, this should also include the amount that you are requesting for a loan and how do you plan to repay it. Most importantly, include the alternative method of repaying. This means, that if your plan fails, what is the other source through which you'll be able to pay off the loan.
  6. 6
    Submit your resume- This step includes the resume of the owner as well as the head of several departments in the business. Like in any other employment sector, the resume in the banks also prove your acumen for holding and running a business.
  7. 7
    Keep a check on your details- The banks/ loan providers basically look for collateral, investment, resource management plan, flow of cash (in and out) and lastly, the working capital of your business. Collateral refers to a possession of yours that you would mortgage or use to repay the loan if your business does not make profit. Investment refers to the money that you have spent or are willing to spend in your business. Resource management plan refers to how you deal with your daily management including payments. Lastly, a larger capital would be preferred by the banks to give loans.
  8. 8
    Fill the form- Visit the bank and fill out the form for loan. Make sure that every information that you enter is correct, otherwise your form will be rejected.
    Business Loan Application 600x328.jpg
  9. 9
    Wait for the bank to contact you- Getting a loan can be a quick process but that completely depends upon the financial institution you are planning to take a loan from. Have patience and wait for their call.

Tips

  • The documents that you provide should not be older than 60 days.
  • Be confident while talking to the bank representative.
  • Your business plan should be completely profit making.

Article Info

Recent edits by: urvashi sharma

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