How to Get a Small Business Loan in 3 Steps
Here are the 3 steps to getting a small business loan:
1) Map Out Documentation Requirements
The first step in trying to secure a small business loan is to prepare all of the necessary documentation. Whether you are trying to secure a small business loan from the SBA or independently through a bank, the documentation must be flawlessly organized and professionally presented to ensure your best chance at getting the loan.
That being said, do your homework! Make sure to research each and every small business loan requirement that you can find. When you start meeting with banks, having every base covered as far as required documentation will make the process much easier and will give you the highest probability of securing a loan.
For example, according to the SBA government website, there are 73 forms, items and requests for information required to apply for a small business loan. This can seem pretty daunting but remember that the SBA small business loan process is the most difficult and the information financial institutions are requesting can be consolidated to make the process easier.
2) Prepare a Detailed Business Plan
Make the process simpler: for instance, a business plan can be customized to include all of the necessary documentation for a small business loan. Be sure to make a list of all the necessary items and check them off one-by-one as you integrate these items into the business plan. If you are utilizing a consultant, make sure the person has plenty of experience in preparing documentation for small business loans. Some items should include personal financial statements, business financial statements or a detailed pro-forma, financial projections (5 year), ownership and affiliations, business overview and history, and resumes or bios.
By preparing a detailed business plan, you will have a document that goes above and beyond what any financial institution is requiring and all of that information is consolidated into one document to make the process easier and more organized. It will show your financial capability, personal and company track record, any pertinent strategies and competitive advantages, and overall it will reduce the inherent risk that any bank is exposed to when issuing a loan. Also, the loan officer will appreciate your organization!
3) Make a List of Banks
After the business plan is prepared, make a list of all banks that you will meet with to request a loan. For most small businesses this will be a list of banks in close geographic proximity to your business. Furthermore, as is the case with most small business owners or startups, you most likely have a pre-established relationship with a bank. Since you are disclosing all your financial information you may as well go with a bank that you have already done work with, a bank that you can trust. These banks mostly likely already know your personal financial history and your company's financial history, and if you have demonstrated the ability to operate your business with financial accountability, they are more likely to give you a loan.
Download Our Business Plan Template!If you want to create your own business plan quickly and easily, we now offer a business plan template that allows you to develop a professional business plan in hours or days, not weeks or months.
Visit this link to learn more: http://www.growthink.com/products/business-plan-template
OR, Let Us Develop Your Business Plan For You
Our professional business plan consultants can create your entire business plan for you. We will make sure your business plan is sound and ready for investors so you can continue to focus on running your business. Over the past decade, we have created business plans for hundreds of entrepreneurs like you.
For a FREE initial consultation, call 800-506-5728 or complete the form below.
Important: Growthink will never share or sell your personal information and we will keep all business information completely confidential.