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What you will need for a small business loan

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Business owners must realize that how you present yourself, can often times mean the difference between getting the small business loan you need, and going home empty handed. Small business owners who take the time to make sure they have the right loan documentation, and present themselves in the best possible way, will be the most likely to get the funding they are seeking. Financial experts agree that whether you are seeking a small business loan to start a new venture, or improve your existing business, taking the time to polish your business plan, and gather documents that will highlight your prior successes, may help make your business a more appealing candidate for a loan. Here is what you need to know about what you will need for a small business loan.

  • Know what you credit report says-The first step when applying for a loan, is to pull both your personal and business credit reports. This is because your prospective lender will view you as the business, and therefore your personal creditworthiness will come into play as well. You will want to go over both credit reports carefully, to insure that all the information is accurate. If there are mistakes you should take the time to fix them before going in to see your prospective lender.
  • Be able to show that you can repay the loan-This is especially important if you are seeking funding for an existing business. You will want to provide records that demonstrate that you have a history of positive cash flow. This can lend weight to your perceived ability to be able to repay the loan in full and on time. For potential small business owners you may need to show that you have had past fiscal successes. This can be done by providing a record of positive earnings, from a formerly-owned business, or a business you operated in the same industry. If you can provide an accurate and positive picture of your business finance abilities, it will inspire the lender to look at you more confidently.
  • Make sure it is in writing-You will want to have a record that documents your business accomplishments. This will help to provide your lender, with valuable insights into your ability, to successfully execute your business strategy, and accomplish your goals.It is important to make sure that this includes loan repayment records. If you have successfully repaid a prior business or personal loan, showing the bank records may inspire confidence for your lender, in your ability to repay your debts.
  • Let them know you are the right person-You will want to include details showcasing your relevant industry expertise, as well as tangible successes that you accomplished while owning or operating a business, in your chosen field. You will want to include prior achievements of note. This may include but is not limited to:
    1. How you increased revenue growth
    2. How you managed a business expansion
    3. How you went about securing new projects and/or clients.
    It is important to understand that your management team is also integral to the success of your business; so you want to be sure to highlight their expertise and industry successes, as well. Experienced business lenders understand that they are investing not just in ideas, but in the people who will run the business.
  • Have a concrete plan for the future-Vague ideas about expansion or market numbers will not impress your lender, or inspire their confidence. You want to be able to show that you have done the research and have a place, for your company in the marketplace, for the long-term.
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