How to Get a Small Business Loan or Capital in 5 Easy Steps
are you a small business owner surfing through the current economic tsunami or just need that extra
cash to expand operations or purchase inventory?
Have you considered small business funding but are too confused to make the first move?
We completely understand your uncertainty. In fact, you may have countless doubts about how small
business funding works.
This is why we decided to take some time to dig deep into small business loan and funding facts and
break them down for you into 5 easy steps! Check them out and get moving, your business is waiting on
1. Develop a strong business plan for you and your funders.
Most funders will want to know how you plan to use the money and make sure that you have a strong
ability to repay. Building a strong business plan will give funders more confidence in your business,
increasing your chances to be approved for small business funding. Also, if you determine how to invest
effectively, you will be able to decide how much you need and most importantly, how much you can
afford to borrow. Your plan should include the most current and projected financials to clearly
demonstrate that your business will have enough cash flow to cover ongoing expenses and payments.
We recommend that it includes: a brief description of your company, service and product; a market or
industry analysis; facilities and operations plan; marketing and sales strategy. Last, but not least a SWOT
(strengths, weaknesses, opportunities, threats) analysis could also shed some light on where you are
right now and how you'll get there. Read more about how to create the ideal business plan for 2020 and
2. Check what type of funding is right for you
There are different types of loans that small businesses can apply for from traditional lenders, such as
banks or credit unions. Some of them are:
• Term loans (or installment loans). These traditionally structured bank or credit union loans provide a
specific amount of money at a fixed or variable interest rate for a set period of time. They typically come
with favorable conditions, but their requirements are strict.
• Small Business Administration Loans. These work through SBA-approved intermediary lenders,
possibly a bank or credit union. For most programs, a strong personal credit score is required. They also
have a lengthy application process, and funding can take several months.
3. Determine your chances of getting approved for the Loan
Before you apply for funding, it’s important to understand how funders will evaluate your application.
They might take a look at your personal credit score and history, cash flow, time in business, collateral,
industry, and loyalty. Filter your initial applications and only apply to those where you are most likely to
find success. SBA loans, for example, ask for you to be current on all government loans with no past
defaults. This means that if you’ve ever been late on a federal student loan or a government-backed
mortgage, you’ll be disqualified. Both the SBA and bank loan qualification process will require a hard
inquiry on your credit report. So, save your visit to the bank if your credit score is less than 700 and
forget about SBA loans if your personal credit score is below 640.
4. Prepare your documentation
Depending on the type of small business funding you’re applying for, paperwork requirements vary. At
the bare minimum, you will be required to show the lender that you have the means to pay back. When
dealing with bank or union credit, you should expect to provide: balance sheets, profit and loss
statements, both personal and business credit reports and income tax returns, bank statements,
business licenses, franchise agreements and in some cases, quotes from contractors and vendors.
Congrats! You’ve taken the time to get your small business loan and funding facts straight. Now you’re
finally ready to begin the application process. Depending on the lender and the type of loan you’ve
selected, you may have to visit a financial institution or call the lender.
Alternative Funding Sources
Business Loan and Capital LLC works to help owners of small and mid-sized businesses access the
funding that meets their needs. Established in 2010 and founded by entrepreneurs, BLC understands the
challenges associated with small business loans and their need for working capital.
Visit businessloanandcapital.com or call 678-661-3815 and connect with a funding expert to discover the
options that make sense for you and your business.