6 Tips for Getting a Small Business Loan

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a Small Business Loan
6 Tips for Getting a Small Business Loan

Getting a small business loan used to be relatively easy, but this is no longer the
case. With the current weak state of the economy, loans of all types are now more
challenging to acquire.

If you want one of these coveted loans, you need to be well informed and then use that
information wisely to improve your odds.If you're willing to do things in the most
advantageous way, your odds of success will go up dramatically.

Use these 6 tips to your best advantage:

   1. Keep your day job. Lenders today want to see a secondary source of income,
      ideally one that is capable of repaying the loan. If your only source of income
      is going to be the business for which you are seeking the loan, it's going to be a
      tough sell right now. Keep your job, at least until after you've gotten the loan.

   2. Have some collateral. Be prepared to have liens placed against any significant
      assets you may have. It’s more difficult to get a loan if you have few assets.

           If you don’t have a lot of assets, it simply means the other parts of the process
           will have a greater significance. If you have a good idea and the expertise to
           make it work, you'll find someone willing to help.

   3. Maintain excellent records. The single-page application is rarely found in
      today's economy. You'll need a lot of qualifying information just to apply. You
      may as well have hard copies of everything ready to go. This includes income
      tax information, pay stubs from your current job, verification of assets, and


                                      4. Have a business plan ready. Having a solid business plan helps to put the lender's
                                         mind at ease. Include all the information related to how the business will
                                         operate, the people involved in the running of the business, their experience,
                                         and reasonable income projections.

                                              Remember, lenders see business plans every day; if you're projections
                                              are unreasonable, they’ll know it, and your credibility will be shot.

                                      5. Appear respectable. Your prospective lender will certainly crunch a lot of
                                         numbers during the decision-making process. However,there is also subjective
                                         evaluation going on as well. Your lender will be questioning whether or not
                                         they believe you're the type of person likely to repay your loan.

                                              They will also try to figure out if you're the type of person capable of
                                              turning a loan into a stream of income. Your education, experience, and
                                              references will all be considered.

                                      6. Ensure your credit is solid. Your credit history is a very important part of the
                                         loan application process. Be aware of everything in your credit report, both
                                         the good and the bad. If there are any mistakes to your detriment, have them
                                         corrected before filling out the loan application. In addition, do everything
                                         you can to repair negative information, too.

                                   As with many things, the devil is in the details. Following the above tips is not a
                                   guarantee that your application will be approved, but it will greatly increase your
                                   odds of success. Take the time to put the odds in your favor. Getting a small
                                   business loan might not be easy, but it can be done!


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Curtis Rose is an experienced professional with extensive experience in all
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