When it's time to expand your business, finding cash is always an issue. You know you can make a profit if you can get things through the pipeline, but lenders may not be as confident. So, what does it take to convince the bank and get a loan?
The key thing to know about small business bank loans is that you are often judged on your personal credit. If your business had a long and successful history of borrowing, you wouldn’t be reading this. Instead, you’d have lenders beating down your door with loan offers. After you build a history of borrowing in the name of your business, you can (and should) begin to separate your personal credit from the business' credit.
Building the Foundation
While we need to work on challenges specific to business bank loans, we should first make sure that you are a viable candidate for a personal loan.
If you haven’t already, you need to build a credit history to give banks an idea of how responsible you are. Also, you need to know what they see when they pull your credit for a business bank loan. Take advantage of the U.S. government’s free credit report program – and continually monitor your credit going forward.
Over time, you'll want to build credit for your business and stop using personal credit. Business credit is similar to personal credit, but it's important to have both. Keeping things separate can help protect (and build) the value of your business, and your personal assets will be safer as well.
- Find out what it means to use Personal Guarantee Business Loans
- Learn about Building Business Credit
Specifics of Business Bank Loans
Now that we’re sure you’re a good borrower, let’s move forward. Business bank loans come in a variety of flavors, from a variety of sources. Below you’ll find two good articles discussing the topic.
For the more established business, you’ll need to cover the basics discussed on the page about small business bank loans. You’ll learn how to prepare and where to go. To win your loan, bring plenty of supporting information, and choose a bank that's likely to approve you.
For brand-new businesses, or those that might be more of a risk, you’ll want to know the basics of startup business bank loans. This page will alert you to some alternative funding sources in addition to your typical banks. In particular, you should investigate peer to peer lending options.
The best way to get a business bank loan is to take action. It is surprisingly similar to the best way to get customers for your business. You’ll have the best results with detailed preparation, and by letting people know about you and your business. Once you’ve done that, start pounding the pavement for a good lender.