To get the best rates, be ready to show a history of steady, strong cash flow or a business plan with an assurance to repay the debt. I also list some options to consider.
How should an entrepreneur prepare to apply for a small business loan?
Be ready to show a history of steady, strong cash flow or a business plan with an assurance to repay the debt.
What steps can an entrepreneur take to improve loan approval chances?
Maintain a good personal credit score. Banks will require a personal guarantee on the debt so good personal finances improve the odds of getting a loan. You may also need to pledge collateral or find other guarantors for the loan.
Can entrepreneurs with bad credit qualify for a small business loan?
Community banks or credit unions conduct a detailed inspection of poor credit scores. It may be due to a past event and you have shown good financial practices before and after the event. You may also need to pledge collateral or find other guarantors for the loan.
What lending options are there for small businesses that don't qualify for a conventional loan?
The small business administration, known as the SBA, has a variety of loan programs for small businesses. Two major loan programs are the 7(a) program for general business loans and the CDC/504 program for major fixed assets. There are also many other smaller programs.
Customers of equipment dealers may receive financing from lending subsidiaries of the equipment manufacturer. Peer-to-peer lending allows large amounts of investors to provide funding for loans.
I wish you a swift and easy loan approval. I wish you well.
- Rob Stephens
Founder of CFO Perspective and the Finance and Strategy Toolkit (FAST)
CFO Perspective Resources
There are many types of business loans available today. How do you choose the right type of loan for your business? In this video, I’ll explain The basics of many popular business loan choices, how to avoid loan mistakes that could increase your borrowing costs, and a clause to look out for in your business loan agreement.
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