How to secure small business loans..?

Discussion in 'Growing and Managing a Business' started by williamjames732, Apr 9, 2013.

  1. williamjames732

    williamjames732
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    Hello friends,


    I am looking for small business loans for my business. This is my first time that I am go for small business loans. So, I want to know How can I secure business loans fast. What are things to remember before apply for small business loans

    Reply for help me.

    Thanks
     
  2. AnushaJain

    AnushaJain
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    Shop around

    It is important to remember is that not all companies that offer fast loans are the same. The money that they lend may not vary, but the rates of interest and terms of the loan will. Make sure that you shop around and compare what different companies have to offer. Don’t just look at the details of the loan either; talk to the people behind the money. How do they treat you? Do they come across as interested in finding the right solution for you? Or are they merely trying to get you to take out the largest loan possible with the highest interest rate?

    Know your limits

    Perhaps the most important thing to remember is to know your limits. How much can you afford to repay each month? If the interest payments on your loan will exceed this figure then it doesn’t matter how good value the loan is, you can’t afford it. Analysing your financial position accurately before taking out a loan, so that you know your limits, will prevent you from getting into trouble further down the line.

    Make a payment plan

    Once you have established how much you can afford to pay in interest and have selected a loan that does not exceed this amount, you should take the process a stage further by putting together a formal payment plan. Where is the money going to come from? How are you going to make sure that they payments are made in full and on time every time? Creating and implementing a payment plan will take all the guesswork out of repaying your loan and will reduce the risk of it becoming a burden that you struggle to handle.

    Tell the truth

    Never be tempted to give false information about your financial situation in order to get approval for loan. First and foremost this is morally and legally wrong. Secondly, loan companies perform extensive checks before lending money so you will almost certainly be found out. Finally, and perhaps most importantly, you put yourself at a huge risk if you obtain a loan under false pretences. It is in the interests of loan companies to lend you money, so you will not be refused without good reason. If you obtain a loan by deception that you would not have got honestly, the chances are you will struggle to pay it off.

    Don’t commit until you understand

    Cash loans come with an array of terms and conditions. No matter how keen you are to get the loan sorted out, never be tempted to commit yourself before you understand every last detail. Loan debt has the potential to be a huge burden and the misunderstanding of repayment terms and conditions is a big factor. Make sure you don’t fall into this trap.
     
  3. scottbaird

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    There are things to remember before apply for small business loans like:
    1. Start with a business plan
    2. Prepare financial statements
    3. Clearly state the purpose and amount of the loan
    4. Look into your personal credit history
    5. Know your capacity for collateral
    6. Understand what the loan will cost you in the end
    7. Research your borrowing options
     
  4. williamjames732

    williamjames732
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    Thank you guys for such informative reply!!!
     
  5. Giles Parker

    Giles Parker
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    It's depend on owner and type of business. If owners have a good experience in the same line and have a good business touch then definitely business and profit both are will be growing up and they can pay them business loan very easy.
     
  6. Marketest

    Marketest
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    I would add to this that you need to research your target market; show proof that your business idea/product/service is wanted and needed by your target market.
     
  7. Azarius

    Azarius
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    Besides proving that your business is worthwhile, I urge you to focus on some other aspects of loans as well.
    For one, not all loans are good. Make sure you look and compare the interest rates. For example, you may receive a loan with a 5% interest rate over X time. Another place may give you a loan with a 2% interest rate over X time.

    (Interest rates are how much MORE than the specific loan you will owe over X time).
    You should also pay attention to the fine print when you sign anything. Currently, debts and loans are some of the most bankrupting features in America.
     
    • Like Like x 1
  8. Paul78

    Paul78
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    Thanks for the question and for some of the very useful advice. I am moving to the US soon and might look into setting up a little business, so some of this advice might come quite handy :)
     
  9. Rachel S

    Rachel S
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    Almost all banks require a small business to offer collateral for a loan. Here are a few tips on how to use your assets to secure financing for your company.
    Below are a few tips on how you can use your assets as collateral, and how you can mitigate the risks associated of defaulting on a loan.

    1. Keep Detailed Records of your Asset's Worth
    2. Know What You Can Use as Collateral
    3. Real Property
    4. Business Inventory and Accounts Receivable
    5. Understanding the Risks
    6. Negotiate When—And If—You Can
    7. Consider Peer-to-Peer Lending

    While loans typically amount to less than $25,000, there's often less red tape involved in obtaining a peer loan. Prosper.com, for example, allows borrowers to choose a loan amount, a purpose and then post a loan listing. Hope this will help ypou :)

    Have a charming day.

    Rachel !!!
     
  10. williamjames732

    williamjames732
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    Thanks Rachel!! For your valuable reply!!

    My other question is : Is personal credit score id also matter when we are going for business loans..?
     
  11. platnumcn

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    Business loans also require guarantors, if your business is not established or you are just a startup. In that case, you being the whole and soul must have a good credit score, in case you are looking for business loans.

    Lemme know guys, if I am correct in this or not.
     
  12. alicemenezes

    alicemenezes
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    A few things that are a must have before applying for a loan are a business plan, financial status, future business scope.
     
  13. williamjames732

    williamjames732
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    @alicemenezes How can I know that my business has scope in future..?
     
  14. alicemenezes

    alicemenezes
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    Look at other people in the same industry. Learn how your competitors business is working out for them.
     
  15. FaaastCash

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    I think you can get a payday loans also. it will helpful for you. If need some emergency loans, you can contact to FaaastCash.
     
    #15 FaaastCash, Jul 24, 2013
    Last edited: Jul 24, 2013
  16. Ivan

    Ivan
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    What kind of business do you have? There are many options other than a traditional business loan you can apply for. Merchant loans, Angel investors, Hard money loans are a few of them. This post explains what they are.
     
  17. andrrival

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    Good market knowledge is very vital for business success. Take a deep interest what your competitors are doing.
     
  18. richardlong3

    richardlong3
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    Thank you very much for sharing useful information of small business loans
     
  19. candrew

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    First you have to select criteria for your business. For small business or short term loans you can consider merchant cash advance loans which is really reliable than bank loans and personal loans. There will be so many loan options but merchant cash advance is risk free loan for your business.
     
  20. Business Attorney

    Business Attorney
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    Unlike equity investors who understand that they are risking their entire investment, lenders expect to get their money back, with interest. If you want a loan, you have to be able to convince the lender that it is not likely to lose its principal. That can be done in a number of ways. If you personally have good credit and another source of income, you may be able to personally guarantee the loan to the business. If you or the business have assets that the bank can sell in the event of a default, you may be able to secure a loan backed by those assets. If the business has an established, dependable source of income, the business may even be able to get a loan with neither a personal guarantee or collateral, but that is very rare for a small business.

    Often, you may be able to get a loan by giving the bank a combination of the above. In the case of a start up, it will almost always require the combination of some collateral plus a personal guarantee. The exact mix depends on the business.
     

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