Many small business owners who have survived the bumpy economic roller coaster these past couple of years are now ready to seek small business loans to help maintain and grow their businesses.
To increase your chances of getting a loan, the BBB recommends:
Talk to the U.S. Small Business Administration or its free counseling partners. The SBA has lender relations specialists who work at field offices in every state. The SBA’s partners can also help and include about 900 Small Business Development Centers at colleges and universities, about 100 Women’s Business Centers and a network of about 10,000 retired executives (called SCORE) who mentor entrepreneurs and small business owners.
Review Your Credit Report. Lenders take into consideration your personal credit history and if your report has any errors it could affect your chances of getting the loan. You can check your credit report once a year for free with the three major reporting bureaus – Transunion, Experian and Equifax – at www.annualcreditreport.com. If you find errors, contact the reporting bureau to set the record straight.
Create a Comprehensive and Professional-Looking Business Plan. Lenders want to know that you have done your research, considered your risks and the current climate for opportunity, and planned for the future. Your business plan needs to be comprehensive and professional in both content and appearance.
Show that you’re personally invested. If you have money invested in your own business, it shows the lender that you are personally dedicated to the success of the venture.
Plan to pay it back. Lenders are in the business of making money. To that end, they want to know that you have a solid plan for paying back the loan and can also provide enough collateral to cover the loan if the business fails.
Start with who you know. If you already have a good relationship with your personal financial institution, start your search there. Ideally, your lender also works with the SBA, which will widen your loan options. Don’t rule out the possibility of getting a loan from a smaller local bank. You can find a list of trusted financial institutions as well as check out BBB Reliability Reports for institutions you are considering doing business with at wynco.bbb.org.