Ask SCORE =
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Many
otherwise confident entrepreneurs dread the thought of applying for a small
business loan. They may need money to launch or expand a business, upgrade
equipment or pursue a promising research and development program. But the
thought of trying to convince a loan officer that the investment will be
worthwhile generates anxiety. If the bank and other prospective lenders say=
no,
what recourse does the business owner have?
The=
good news
is that banks really do want to help small businesses with their capitaliza=
tion
needs, especially when the loan application package furnishes the informati=
on
they need.
Ban=
ks may
offer an unsecured loan based on assets, credit history and ability to repa=
y.
However, these loans do not require you to personally secure the loan with
personal or business collateral. The more common secured loan requires that=
you
guarantee your willingness and ability to repay the debt with an asset such=
as
real estate, stocks or securities. Loan packages become more detailed as the
size of the loan increases or the length of the repayment timetable is
extended.
As = part of a loan application you will generally be required to provide a business pla= n, resume, credit history with references and specific loan documents. General= ly, loan officers require the most information from a first-time borrower. For = both new and existing businesses, banks will want to know your level of education and practical business experience, particularly in the area of management.<= o:p>
For
existing businesses, the bank may request the credit history and an accounts
payable balance sheet, plus a business plan that clearly describes the
business, its goals and objectives and supporting financial data. A well-co=
nceived
and thorough business plan will have an impact on the bank’s percepti=
on
of your commitment to the business and its financial success.
If =
you
would like to discuss this topic or business planning, business growth
strategies or a specific business issue, contact SCORE® “Counselors to
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