small business loan?

Question

Do you have to have good credit for the loan. I never had a business before but I have a good idea what i want to do.

Answer 1

It depends on what type of small business loan you want to get

Some banks extend what they call "small business lines of credit" through credit cards. Those are easier to get.

However, if you're applying for a loan and if it is a big amount, banks and even the SBA wants to see the following from you:

- A business plan explaining what the business is

- Your background and experience in the business -- in my experience, this is KEY in the eyes of the bank because they want to make sure that you know what you are doing and that you can make the business work. If you don't have any experience with the business, have someone on board that knows the business to give banks assurance that someone will guide you

- Your credit factors because it shows your dependability and how well you handle credit. They will do a credit check on you and poor credit history may be frowned upon, or even reason for the disapproval of your loan application

- Your collateral. Banks, even SBA guaranteed loans, want the borrower to show collateral. They want to be guaranteed that somewhere somehow they can get payment from you

- Condition or terms of loans. Banks would want to know three important things: "How much money are you requesting? What will it be used for? and For how long will it be needed?" Banks oftentimes prefer to approve loans for items that can be identified, has lasting value, and can be repossessed and sold if things fail.

Answer 2

Contact the Small Business Development Center at your local community college, they will point you in the right direction.