How To Get A Small Business Loan for Bank and SBA Loans | Behalf
3 Tips On How To Get A Small Business Loan
If you landed on this page you are probably a small business owner weighing your business financing options. Sure, small business loans sound like the safest and most affordable option, but you hear how hard it is to get approved. One look at the other, confusing alternative small business lending options and you likely find yourself circling back to traditional small business loans. Business financing is a risky business, but that should not deter you from continuing to search for the perfect financing option for your business. If you procrastinate these evaluation processes, you might be forced into a last minute financing product that harms more than it helps. The time to apply for a small business loan is now.
This article will focus on how to get a small business loan with either a bank or the SBA. If you can apply and secure one of these loans, you can rest easy knowing that your business is out of harm’s way and beyond the reach of predatory lenders. These loans are heavily regulated, bank loans even moreso. Strict regulations are a blessing and a curse because they protect the lender and your business, but they make it harder to get approved. SBA loans are backed by the U.S. Small Business Administration. Bank and SBA loans are both low-cost, but SBA loan regulations are slightly more relaxed allowing for more flexible terms.
Regardless of which type of small business loan you apply for, both are fiercely competitive so you want to give it your best shot. The following tips will help you stand head and shoulders above other applicants:
1) Set Realistic Goals
You need to assure your small business loan lender that your business is a sound investment. In order to do so, you must set realistic goals for your business. Only request a loan amount that matches your business needs. If you ask for a loan that is too large, it will send red flags and keep them from taking you seriously as an investment. The larger the loan amount the greater your chance is of getting rejected. Look up the typical range of small business loans to make sure you are in the right ball park and only request what you need.
2) Best Foot Forward
Consider things from the lender’s viewpoint. They are putting themselves in a vulnerable position when they lend to small business ventures. You want to make them as confident in your business as you are. Make a good impression by dressing professionally and preparing a business plan. Make a case for your business, showing that you understand your business needs and articulating your financial situation. Demonstrate your preparedness to offer property as collateral. If you show that you are willing to stick your neck out for your business, they will be more likely to follow suit.
3) Choose Wisely
It is not just the lender evaluating you and your business; it works both ways. Make sure you choose a lender that is even willing to lend you their ear. You have a much higher chance of getting accepted at a small bank than a large one. Large banks tend to finance larger business ventures. Also make sure you apply for a small business loan with a bank or a SBA that is a good fit for your business. It is supposed to help your business, at the end of the day.
Treat your application for a small business loan like a job application. The lender is probably not familiar with your business, so make a good first impression and show that you are a passionate business owner. Like a job interview, don’t let a rejection from one lender lead you to believe that you will be rejected by all lenders. Learn the reason you were rejected and amend your application for the next time you apply for a small business loan. There are other viable business financing options than small business loans. Don’t let rejection cause you to lose faith in your business. Behalf offers a purchasing line of credit for your business. Behalf lines fund business purchases and empower small businesses through a transparent payment structure. It is a flexible alternative to a loan that is fast and convenient, with no hidden fees. Pay for inventory, production and large business purchases with your Behalf line of credit and create a custom payment schedule with up to six months terms.