Everyone has their own views and dreams in their life. When it comes to business especially people have high expectation’s about their career and business. Raising capital is one of the initial steps required to start up; since there is a lack of lender knowledge most business people panic when they want to approach any of the banks or commercial finance companies for a small business loan. It’s not so easy for anyone to start a business until you have the funding in place.
Compared to other loans, business loans are more critical so it is the responsibility of the lender to work on the situation and understand and minimize the associated risks. So the best thing to do is to submit a loan proposal which includes your business plan, a complete description of your products and services, the value of assets you will use to secure the loan and location of the business. Review your credit history and if you find anything wrong in it try to change it immediately to build a good impression for the lender. Describe fully why you need a business loan and how much is needed.
Depending on the stability of the business, credit history and various other factors, the maximum loan amount offer is decided by the lender. Banks have different lending criteria so visit some small banks as well as mainstream banks for the best chance of securing a loan. Talk to your own bank manager first and request an appraisal of your books to see if you are a good applicant for a small business loan.
Potential lenders will want to see where you have taken the business, where the business is now and what are your plans for the future growth of your business; and how you will pay any loan they may extend to you. For a new business the financial records of the owners are required to evaluate your financial situation.
After the application, proposal and business plan are all complete and submitted; the next step is just to be patient. In some cases, it can take weeks or even months for approval.
If you are offered a loan find out how good the interest rate is before signing up and go through the loan rules and regulations carefully.