Help Finding a Small Business Loan

Finding a Small Business Loan

Established businesses that wish to find funding often encounter difficulty. Major lenders’ credit and collateral requirements, income guidelines and more demonstrate daily how difficult it is to get a small business loan. If your established business needs capital but you need help finding small business loans, consider these tips.

Begin at the Beginning

Before you begin, make sure your own financial house is in order. Order your credit reports and examine them carefully for errors; ask for corrections if necessary. Businesses and individuals that pay their bills on time and in full while maintaining long-established banking relationships with a mix of loan types will have the easiest time securing financing.

Sources

Traditional lenders, the Small Business Administration and the Internet are your best resources for researching and securing a small business loan. Although top-tier borrowers may find traditional lenders the best source, don’t overlook the SBA and the Internet.

The SBA offers several resources for small business owners. As always, rates and terms are credit- and collateral-dependent; those with less-than-sterling balance sheets and FICO scores will pay higher rates initially, but establishing a consistent repayment history may make refinancing a possibility 12 months or more down the road.

Internet-based sites, such as CNF Exchange, offer small business borrowers the opportunity to connect directly with lenders and investors to create mutually beneficial loan terms. Instead of calling and negotiating with lenders directly — a process that can take several weeks, if not months — Internet-based lending exchanges significantly reduce the amount of research required to find a suitable lender.

Desirability

Even with Internet-based lending, the most qualified businesses will find the friendliest terms because they are low-risk borrowers. For you and your business to become a low-risk borrower, build and maintain a solid credit history by always paying your bills on time. When you apply, check your application carefully for errors and sloppy typos. Be prepared to produce cash flow, income and balance sheet statements, as well as a use of proceeds statement.

Remember, banks want to make money on your loan but they also expect repayment in full. Demonstrating how you’re capable of meeting that expectation will make you a safer, savvier borrower.