One of the most daunting tasks for small business owners is finding the capital they need to grow their business, even if they have bad credit loans guaranteed approval at the most neediest situation to meet the demands of their customers easily. In many cases, the small business owner depletes his or her savings, maxes out personal credit avenues and exhausts the generosity of family and friends before contemplating getting a small business loan. But, getting a small business loan can mean the difference between a successful small business venture and bankruptcy.
Entrepreneurs are the heart and soul of the American economy. However, living the American dream of being your own boss is expensive. You have to buy raw materials, equipment, pay employees and taxes. One small unexpected expense can put your small business in jeopardy. The federal government, more specifically the Small Business Administration, understands how important small businesses are to the overall economy and developed the Small Business Administration to assist owners in getting the money they need to be successful.
While the federal government does not make loans to small businesses directly, they do insure loans made by traditional lenders. This helps get money into the hands of more entrepreneurs since lenders are more willing to lend based on the fact that if the borrower defaults, the federal government has agreed to pick up part of the tab. The federal government works with banks and lenders of all shapes and sizes and offers many different products, so the odds are pretty good that the bank you use to hold your checking and savings accounts is also approved to assist you with getting a small business loan. Also, state and local government organizations as well as several non-profit agencies are approved to make small business loans, so if banks make you squeamish, you can try locating one of these organizations for your small business funding needs.
There are several different small business loan products available, each with their own qualifying criteria. However, most will require you to have a business plan, a list of what you need and who will be supplying it, other business debt obligations, and the names of your management team, if you have one. You will also need to be prepared to tell the lender exactly how you plan to use the proceeds of the loan and how you anticipate these changes will affect your future earning potential. Some loan products will require that you submit evidence of your experience in the field in which you are doing business as well as some personal background information. Like with most loans, you will need to be prepared to submit to a credit check, both personally and via the business, as well as submit both personal and business financial documents to prove that you have enough money to pay back the loan. You may be asked to provide assets that can be listed as collateral as well. The SBA provides a helpful guide for preparing for the application process here.
While all of this sounds a bit overwhelming, understand that getting a small business loan through the SBA is generally less expensive than through other traditional means and more business owners will qualify for an SBA loan than a loan made through a private lender. And, the end result will be a well funded small business venture that can expand with its customers’ needs.