What are my options as far as small buisness loans in the U.S.?

Question

I don't know how to go about getting a loan or how much money I would need. Where can I get more info about this?

Answer 1

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

Research, research, research – this cannot be stressed enough. Read as much as you can about the process. 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!

Answer 2

To apply for a business loan:

Create business plan. It must include projections for at least 2 years.

Make sure you have 20% - 30% down payment

Make sure you have collateral. The following is the formula to calculate collateral:
Collateral = (Personal Real estate value*0.8 – Mortgage) + Commercial Real Estate Value * 0.8 + Equipment value *0.5 + Inventory *0.1

Make sure your credit score is 680+.

Make sure you have relevant experience. Banks will never finance career change.

Collect all necessary financial documents:
1) Personal tax returns for the last 3 years
2) Business tax returns (when buying the existing business) for the last 3 years
3) Profit And Loss statement year to date (when buying the existing business)

While choosing bank, keep in mind that banks are specialized entities If you wanted Chinese food, you wouldn’t go to a steak house, would you? Banks are organized the same way. You will never find a bank that does all types of businesses and all types of loans.

Do your homework. Call the bank, ask for a business loan officer and describe your business type and your financial needs. Try to avoid banks that will give you a general answer: “We make our credit decision on a case per case basis”. Most likely you will waste money and most importantly your time.

Complete loan application – make sure there is no arithmetical errors, mistypings and all personal financial information is correct.

Submit the complete package – all documents that were requested by the loan office, in the order that was requested to the bank.


Sincerely,
Marina Lando
President
Business Loan Quest
http://www.business-loan-quest.com
http://www.blquest.biz