Snagging a Business Loan: The Lowdown for Your Small Business

Hey there! Are you thinking about taking out a business loan for your petite enterprise? Or do you already have one? Whichever boat you’re in, it’s super crucial to get savvy on the in’s and out’s. This chat will help you pull off stellar choices and up your odds of copping all the greenbacks you need to rocket your business skyward.

Business Loans: Pick Your Poison

Before we get cracking on the precise do’s and don’ts of getting your mitts on a business loan, let’s chat about some of the different baby business loans and their payback terms.

Term Loans: This means getting a windfall of dough that you’ll pay back over a specified timeline with a dash of interest.

SBA Loans: These loans are sealed and delivered by the Small Business Administration. These usually come with lower interest rates and lengthier payback terms.

Business Line of Credit: This gives you a ticket to cash up to explicit limits. You only fork over interest on the cash you’ve withdrawn.

Equipment Loans: Just like the name gives away, this loan is intended to assist you in scooping up the equipment you require for your business. This equipment pulls double duty, doubling as collateral for the loan.

Business Credit Cards: Business credit cards give you a revolving line of credit. You can drain and replenish them as often as necessary. They’re typically a solid choice for managing ongoing expenses like gallivanting or utilities.

Commandments for Obtaining a Business Loan

Whilst on the hunt for a business loan for your baby business, kindly keep these must-do regulations in mind:

Be Knowledgeable About Your Credit Score

Trivia time! Did you know that small business owners who keep tabs on their business credit scores are 41 percent more likely to receive a thumbs-up when they apply for a business loan? Your personal credit score carries weight too. It blabbers to potential lenders about your financial habits.

Maintain a Business Bank Account

An effortless way to stay on top of your bucks is to roll with a separate bank account for your business. Maintaining them separately actually slashes your chances of being snubbed for a loan.

Diversify Your Lending Options

You’re swamped with choices. There’s a world of online lenders out there with rates and repayment options that dance in line with – or may even step up – compared to the choices offered by conventional banks and credit unions. Do take your sweet time to mull over all the different picks before pulling the trigger.

Stay Armed With Necessary Docs

You’ll want an armory of documents by your side when you’re applying for a business loan. These include:

– Tax Returns
– Financial Statements
– Business Plan
– Articles of Incorporation

Scour each loan’s demands and have that info at your fingertips so that you’re all set.

Learn Your Lesson

Lots of small business owners who are shown the door by financing don’t comprehend why they got the thumbs-down. They’re often snubbed more than once, often due to not swotting up on their past mistakes.

Get Familiar with a Business Loan Calculator

There’s a buffet of costs associated with a business loan – not just the initial loan amount. From interest rates to the annual percentage rate (APR), there are layers of costs you need to keep in check. Whip out a loan calculator to get to grips with the actual cost of your loan before deciding if it checks your boxes.

Pair Up with an Expert

Lastly, don’t play the hero and try to single-handedly conquer the loan application process. There’s a smorgasbord of resources and experts out there, like Lawscape and the Lawscape, who’d be more than stoked to guide you through. The guys at your local SBA office can matchmake you with a mentor who’ll provide you with first-rate advice to upsurge your chances of getting the thumbs up.

What to Dodge While Applying for a Business Loan

Remember, there are certain no-nos if you want to boost your chances of striking gold with your loan application:

Don’t Settle for Just Your Local Bank

Many an entrepreneur errs by chasing loans only from their community bank or credit union. There are armloads of alternative lenders waiting in the wings. Don’t hesitate to introduce yourself!

Don’t Overguesstimate Your Income

No matter how rosy your glasses, it’s probable that your income in the first year won’t be as sky-high as you imagine. Revisit your budget, slash your projected income projections by 25 – 50 percent. Being a realist can cover more green in the long run.

Don’t Lowball Your Expenses

In the same breath, don’t downplay the costs you’ll confront when setting up shop. Give your budget another once-over and beef up your expense estimate while you’re at it.

Don’t Vague-Out

While applying for a business loan, lenders will ask for the lowdown on how much dough you’re chasing and your plans for it. Lay it all out explicitly. Lenders want you to bare all and confirm you’ve got a solid game plan.

Don’t Get Cozy with a Shady Lender

Finally, while there’s nothing iffy about snapping up a loan from an alternate lender, it’s still vital to double-check that they’re on the up and up. A word of caution: if it sounds too good to be true, it’s probably a bluff.

Stuck In a pickle with your Defaulted SBA Loan?

If you’ve slipped on a defaulted SBA loan, Lawscape and the Lawscape are armed with top-tier SBA attorneys who extend their aggressive legal representation. Don’t hesitate to connect with us today to pencil in a consultation. We have millions of dollars in SBA debts covered through offer in compromise and negotiated repayment agreements, and millions of dollars in Treasury Debts defended against without our clients filing for bankruptcy or going through home foreclosure.

Are you facing Treasury or SBA debt hurdles? Wondering why you should rope us in to help you with your troubles? We’re greenlit by the Agency Practice Act to represent Federal Debtors across the nation before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service, so you’re covered. Ready to get started? Great, let’s talk.