Where can I get a small business loan? My credit is not great and my score is 608.?

Answer 1

If you are talking about a small business loan from financial institutions and you have low credit score, your chances are a little tight. You must have collateral and equity investments poured into your business.

You can read here the requirements of Small Business Administration for the small business loans that they guarantee http://www.sba.gov/financing/preparation...

1. Equity investment
2. Earnings Requirement
3. Working Capital
4. Collateral
5. Resource Management

Collateral can be personal and business assets such as house, receivables, stocks and bonds, furniture and fixtures, among others -- that can be sold to pay back the loan. Collateral provide banks with the assurance that they can get their money (or at least parts of it) back, even if you cannot pay. Even SBA-guaranteed loans as well as micro loan programs require some form of collateral to secure a loan.

If you do not have collateral, you will need to have a co-signer who has collateral and can pledge to cover your loan in case you default on payment.

Here is an excel spreadsheet of SBA's lending partners http://www.sba.gov/financing/lendinvest/plplend.xls

If you are talking about a small business loan from financial institutions, you stand very little chance of getting a loan without any capital and collateral. Collateral can be personal and business assets such as house, receivables, stocks and bonds, furniture and fixtures, among others -- that can be sold to pay back the loan.

Collateral provide banks with the assurance that they can get their money (or at least parts of it) back, even if you cannot pay. Even SBA-guaranteed loans as well as micro loan programs require some form of collateral to secure a loan.

Banks, including the Small Business Administration will not give you 100% of the financing you need. They need to see that you are invested in your business -- which means they need to see you have money before they give you money. Otherwise, it's an extremely tough deal.

If you do not have collateral or capital, you will need to have a co-signer who has collateral and can pledge to cover your loan in case you default on payment.

Answer 2

The business of lending is a dense one and should be researched properly. To get started, I suggest contacting the Small Business Administration (SBA) – links below. Entrepreneur also offers a great site dedicated to money & finance – see below.

Research, research, research – this cannot be stressed enough. Read as much as you can about the industry. Here are some book titles that are relevant:

* How to Get a Small Business Loan: A Banker Shows You Exactly What to Do to Get a Loan (Small Business Series, No 1) by Bryan E. Milling
* The SBA Loan Book: Get A Small Business Loan--even With Poor Credit, Weak Collateral, And No Experience by Charles H. Green
* The Insider's Guide to Small Business Loans by Dan M. Koehler

There are plenty of free informational resources out there. Check the source box for links to articles.

Hope that helps! I wish you much success & happiness in all your ventures!