How to Get a Loan to Start a Business

Business loans are sometimes hard to get.  In fact, a bank could be leery of giving your business a loan due to the risk of not getting paid back.  You need to prove that your business is a successful and can turn a profit. Typically, you need to show cash flows and past performance to increase the confidence of a bank before they loan you any money.

Before you do anything in regards to the bank, you need to create a professional business plan.  Showcasing your business and the strengths are two things that any business plan should include.  This is your moment to “wow” the bank.  Don’t hold back; show them everything great about your company.  Due to the large amount of paperwork, one needs to ensure that everything is in order before moving forward with showcasing the business plan.  Lenders will typically contact various clients and partners to ensure that the information you provided in the business plan is accurate.  This will help them make a final decision and possibly give out a loan.

There are other miscellaneous things that you need to get done like creating a business name and registering with your state.  The more you accomplish before going into the bank, the greater your chances are of getting that loan you’ve been wanting.  Double check references and business contacts before finalizing any paperwork.  You need to ensure that you have all your ducks in a row.  The worst thing you could do is walk into a bank unprepared.  If you did that, you not only would be risking a loan approval, but wasting your precious time!

The last step is to research the various banks and find one that you feel comfortable with.  You want a strong bank with a great track record with other local businesses. A bank should be your “partner” through the loan process so picking a great one will help you in the long run.  After you finalize your loan application, it may be a couple days before you hear back.  This is normal because the bank needs to verify your application information.

And don’t forget to check into banks that are online.  You should spend some time to find the best bank account online to make it easier on your business and reduce how much paper you’re using.  Another benefit of online banking is the accessibility.  With apps and laptops, you can literally access online banks from anywhere!

In the off chance you get denied for a business loan, you can contact the Small Business Association and check whether or not you even qualify for a loan.  The more you prepare and research beforehand, the better off you will be.  Trust me, I’ve gone through this process many times and these banks are not here to mess around.  They take their money very seriously!

So, when you do apply for a new bank account for when your loan gets approved, make sure it’s a solid bank you can trust.  You want a partner when you start a business, not a bank that will not help you out along the way.