We have all heard the current economy has made it very hard to get a business loan. Further, getting a business loan without a proven business track record is supposed to be hard. But is it really?
There are plenty of lenders out there with funds for business loans and the good ones will help you learn how to get them. It is always strange to me that lenders are shocked when their borrowers are not familiar with the process. So hear is what you need to remember before you apply. Please keep in mind the 5 C’s Of Credit.
- Character – How you have handled credit in the past.
- Collateral – Security you can provide for the lender for repayment of the loan.
- Capital – The money you have personally invested in the business.
- Conditions – Describe the intended purpose of the loan and how your niche fairs in the market.
- Capacity – The ability to pay back the business loan.
Capacity is the most important decision for a lender who is interested in making a loan. They must decide if you have enough cash flow to make the payments. Then they must consider the length of time it will take to pay it back and if they think you can really do it.
This is all part of a banks risk assessment for the loan. But keep in mind that in order to stay in business, banks and lenders need to make loans. They want to approve you based on the above. So never be afraid to ask for a business loan.
When you go in to apply make sure you bring three things with you to.
- Tax Returns from the last 2 years
- Personal Financial Statement
- Your Business Plan
Next, be prepared to answer a few very basic questions about your intent.
- How much money do you need?
- How long will you need it?
- What are you going to do with it?
- How are you going to pay it back?
- And, What will do if you don’t get the business loan?
If you have a good understanding of everything mentioned above, you will be ready to discuss getting a business loan from your bank or business lender. But what if you don’t?
What If I Don’t Qualify For A Business Loan?
What if you learned about the 5 C’s of Credit and don’t have a business plan? What if you don’t know exactly how much money you need or market data about your niche? How then, do you get a business loan?
The answer is to ask for one. Just ask for it from the right people. There are more loan programs out there than you could ever count. There are several programs for first time borrowers with no business track record or plan. Many are used to establish your business credit for the first time.
For those with no business track record or are first time borrowers, unsecured business loans are an attractive option. They are easy to get and can be based on your personal credit history and require no collateral for the bank.
A lot of business owners don’t even realize that loan programs like this exist but sometimes they are much more attractive than traditional SBA loans. There are few, if any, restrictions on how the money is used and the loan can even be used to pay down existing debt.
Today’s economic conditions require creative financing and getting an unsecured business loan may be the perfect answer for people looking for a business loan to keep their doors open or expand for the future. Fill out the form on the right to get qualified absolutely free!