Do you want to start a new business and need financial assistance to get things moving? Perhaps you already own a successful enterprise, but would like more money for an expansion project. Regardless of your business purposes, there are multiple ways to obtain financing, including loans from the Small Business Association (SBA).
If you’re ready to take out a small business loan, keep these three considerations in mind.
Review All Qualification Requirements
Nothing is worse than getting halfway through a loan application, only to learn that you don’t qualify. We’ll discuss different loan types in the third point, but be aware that SBA loans are competitive. In order to qualify, you’ll have to possess a strong credit history, a business license, and no criminal background. Other loans may expect you to contribute collateral, a down payment, or to apply with a cosigner. Again, make sure you know eligibility requirements in advance before pursuing a loan.
Gather All the Relevant Documentation Before Applying
Small businesses loans are just like anything else these days: there’s a lot of paperwork. You can save yourself lots of frustration and confusion if you gather everything ahead of time.
The typical documentation will include items like letters of intent, your business plan/prospectus, tax returns, proof of income, and the loan application itself.
Check out Every Viable Option
There are several ways to get funding for a small business. We mentioned small business loans, but there are also private financial instruments, secured or unsecured, such as installment loans, business credit lines, and crowdsourcing. Each has its strengths and weaknesses regarding interest rates, repayment flexibility, collateral requirements, and so forth.
Why is it important to know about these? Because if you experience rejection from one lender, you should know there other ways to finance a business. This helps you avoid that dreaded feeling of despair when you may think your entrepreneurial dreams are doomed.
Those are our top three recommendations for important items to review before applying for a small business loan.
The subject of financing can be a tricky component, which is one reason Hallmark Business Brokers offers business coaching to help Sarasota entrepreneurs navigate the potential bottlenecks. Our expert guidance can assist with any aspect of either buying or selling a business. If you’d like to learn more, please contact us anytime at 941-445-4726.