Top Advice for Those Seeking a Business Loan
Business loans are generally more absolutely important to the prospects of a fledgling company or any enterprise aiming to grow.
However, the market for business loans has changed drastically in recent times, as banks, which once dominated almost the entire financial services sector, have shrunk from the lending arena to leave alternative financing options emerging to meet the increasing demands and needs of SMEs.
Looking for a business loan does seem difficult. However, if you have a well-thought-out business plan and put in a lot of effort, you're sure to find one.
Make sure you can fulfill everything you need when finding a source for a business loan.
Capital is indeed one of the most important things that must be fulfilled when you want to start or develop a business. If you haven't met the capital, you can make a business loan. Without capital, a business to be initiated or to be developed cannot run. There are a variety of ways you can get a business loan.
How to Get a Business Loan
The following is how to find business loans that you can do:
Borrow from the Bank
The first way to look for a business loan is to borrow from a bank. However, banks usually rarely lend funds to new businesses, banks will prefer to provide business loans to businesses that have been established and have been running for a long time.
Also, if you borrow from a bank, you must provide proof of the financial health of your business. This is necessary so that the bank can ensure that you are able to pay the loan repayments every month.
Usually, when you borrow at a bank, the bank will offer multipurpose loans, namely loans with collateral. You will need to provide collateral, even if your business' financial statements show that you can afford to repay the loan.
Consider all options
Business loans are not only available to familiar banking groups, who may view loans as the only possible way to finance. In fact, it is very important for businesses to be open-minded and consider the various funding options and loan facilities available today.
The reality of today's business loan market is that lenders know that there is a strong demand for every line of credit they can offer. This is not to argue that there aren't options available to businesses seeking suitable terms, but just to warn against expecting too much when it comes to borrowing money at low interest rates.
The prime rate figure on business loans is designed to be an attractive proposition.
However, it could be that what looks good, may not suit your company's needs. So don't be persuaded easily.
Find out how many Business Loans you Need
There are a number of different SBA loan programs, each with a specific focus.
504 loans are for buildings, land and renovations, for example, Export Express loans help small businesses develop or expand their export market in an efficient financing. By far the most popular are loan programs that allow you to borrow up to $5 million, with repayment terms of 10 years (loans for real estate can be extended for up to 25 years).
Maximum amount of SBA loan
Up to $5 million: CAPLines, International Trade loans, Export Working Capital loans, 504 loans
Up to $50,000: Microloans
Up to $250,000: Community Advantage
Up to $350,000: SBA Express loans
Up to $500,000: Export Express Loans
Up to $2 million: Disaster loans (forbes.com)
Be honest with potential lenders
There's little to be gained from hiding the truth about your organization's financial history while you're going through the loan application process.
Corporate credit reports ensure that key information about your business is made available to related parties,
It's much better to be open and honest with potential lenders, and find out what options are available to your company as is, not as you want.
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