subject: Are You Looking For Small Business Loans [print this page] When looking for small business loan, most business owners consider traditional lenders, such as commercial banks and the Small Business Administration (SBA). The SBA and some banks offer loan programs specifically for small business needs. Before deciding which loan best suits a business, owners should research and compare all available funding resources.
Commercial banks often do not provide loans to start-up businesses, but they may be able to fund an existing business that meets certain requirements. Criteria include supplying necessary financial documents and a business plan. Banks uses these documents to assess the risk of a potential borrower. The more profitable a business, the easier it is for them to obtain a bank loan.
Business owners looking for a small business loan tend to obtain loans from the SBA, a government agency designed to aid small businesses financially. Their most common loan, the 7(a) loan, is available to small business that employ fewer than one hundred employees and that have been denied by other traditional lending. The requirements for start-up and existing businesses differ, but both include providing vital personal and business financial statements along with a business plan and a statement of funds needed. The SBA does not provide loans itself; banks that participate in the SBA guaranty program provide them. Businesses can go to participating lenders and ask for funding. The SBA will guaranty a certain percentage of a loan requested by qualified businesses.
Looking for small business loans requires business owners to research all available funding options to decide which best suits a business's capabilities and needs. The Small Business Association (SBA), commercial banks, and non-traditional financial companies provide small business loans. The loan terms, including interest rates and repayment plans, vary by lender and by type of loan.
The first step in looking for small business loans is to make sure a business meets the requirements for the loan it is applying for. Some loans may be for either start-up or operating expenses, while others may be used for any business purpose. Most traditional lenders require the same financial documents for loan applications: business and personal financial statements, credit reports, and a business plan. Non-traditional lenders, such as independent financial companies, may not have as many requirements as traditional lenders, but this makes their interest rates higher. However, independent lenders can be a good alternative for businesses with poor credit histories.
Once a business meets all requirements for the loan it wants, the business must apply for the loan. Applications are available at a lender's place of business. Many lenders now offer online applications to accelerate the approval process. However, if an application requires financial documents, they will have to be faxed, mailed, or otherwise sent to the lender before the approval process can begin. The SBA does not offer electronic applications, but they do provide application forms that can be downloaded and printed for the applicant's benefit.
by: Madden
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