Can I Bank on a Loan for My Small Business?

Your business dreams are sitting there waiting to be hatched, but money is the issue. On the other hand, your small business is in desperate need of some financial assistance or is looking to expand and needs a little kick in the wallet.

As President Obama pointed out in September regarding the American Jobs Act, everyone understands that small businesses are where the majority of new jobs start.

Whatever your small business situation may be, one of the big questions that all small business owners must deal with at some point or another is how can I go about getting a loan for my company?

In reality, it may be easier than you think, but it is having the patience to deal with all the paperwork, the rejections and so on that leaves many business owners shaking their heads.

In the event you’re seeking a business loan, here are some things to keep in mind:

• While your family and/or friends may seem like a more logical choice to help you begin a business or provide money when necessary to keep the company running or allow it to expand, shy away from this notion. While bank loans can be harder to get, you will not have family or friend issues to deal with when going to a financial institution for a loan;
• Banks are in business to make money and in turn they want your business. While many banks have pulled back in recent years on loans, credit card offers etc. due to tough financial times, many are still loaning. Remember, minus the loans, banks would be out of business;
• Do your homework when searching for a bank loan. Just as you take the time to shop around when looking for a new car etc., it is important you do the same when shopping for a bank loan. Be sure to compare a number of banks so that you have options. It is also important to get some background information on the banks, how stable they are financially and how they are rated, any complaints lodged against them recently etc. Do your homework so you do not get schooled;
• Do your homework when presenting your case for a loan. You just don’t get a small business loan at the flick of a switch. Be prepared to answer any and all questions as to why you need the loan for your business. Have records of your financial history (both personal and professional) ready to present. You should also be able to explain away any financial issues you have had in the past such as defaults on loans, credit card debts etc. While you have questions of the bank, they surely will have questions for you;
• Be professional from start to finish. Just as you would not go on a job interview sloppily dressed and unprepared, do not do so when meeting with bank officials regarding a possible loan. Image counts, don’t think otherwise;
• If at first you do not succeed…. Many small business owners will be rejected on their initial attempts to secure a bank loan. Don’t give up no matter what you do. If you’re having trouble getting the loan from different lenders, contact agencies like the Small Business Development Center or a loan broker to assist you in your efforts. A little rejection early on could actually help prepare you to better run your business.

While the economy continues to spit and sputter, many small businesses are thriving.

If a loan is necessary for your company to do the same, bank on the experience being worth your while.