When a person or group of individuals comes up with a business idea they will need to apply for a small business loan. Lack of preparation and sloppy presentation can cause would be entrepreneurs to be denied by small business lenders. What can aspiring business owners do to increase the odds of having their business credit approved?
Small Business Lenders
There are several different options for financing open to eager entrepreneurs. A familiar mistake many individuals make is to assume that they can get a loan from the government or a community agency easily. The chances are higher that this person will be funded by a bank,family member or friend!
The would-be entrepreneur has a good chance at a small business loan from a bank or lending institute if he is well prepared. Banks and lending institutes don’t like lending to high risk people. An individual with a good personal credit history will have a distinct advantage.
How to Apply for a Small Business Loan – Successfully
A person wanting to apply for a small business loan with the best chance at success, will put together a tidy well thought out business plan and cover letter. This will need to include education and experience in the relevant to the small business field the individual is hoping to be a part of. A clear business plan which shows how the individual plans to run his business and what he will do when things potentially get a little rocky. The application should also include the personal credit history of the applicant. An individual does well to let money lenders know that they will be moving ahead with their small business plans – with or without this particular lenders money.
A comprehensive report with attention to detail will have the most chance with small business lenders. Individuals wanting to apply for a small business loan are best to remember these key points:
- Include personal credit history.
- Have a comprehensive business plan.
- Cover relevant education and experience in field of potential business venture.
- Request enough money to have an effective start up.
- Share how the money will be paid back with cash flow and money projections.
- Appear confident.
Final Thoughts on Small Business Lenders
The would-be entrepreneurs job is to convince the small business lender that he is capable of starting this business. Individuals wanting to apply for a small business loan are best to remember that the money lenders are in business too. Small business lenders do not want to lend money to risky people. The person applying for the loan should make it clear that they have had steady credit for the last x number of years, show any bill-payment or hire purchase records to prove they are reliable.