How To Get That Small Business Loan You Need

Online, June 1, 2012 (Newswire.com) - Small business owners know that at some point, they're going to need to apply for a loan. The question then becomes, Can I qualify for a small business loan?

Times are tough - there's been turmoil in the financial markets, and banks and other lenders aren't too eager to lend to small business owners. So how do you, as a small business owner, appeal to these lenders?

First of all, you have to demonstrate willingness and an ability to repay the loan. You've got to show a lender that your business is making enough money to cover not only your everyday expenses, but also a loan payment. This is called positive cash flow.

Lenders will also want to see that you've been paying your bills and repaying your other loans on time as agreed. This means they'll take a close look at your credit report. Make sure that yours is ready by reviewing it for any negative marks, as well as making sure that the information present is correct.

You'll also want to take a look at how much debt you're already carrying. If you have a heavy load already, no lender will want to give you a loan. Work on repaying what you've got before you apply for additional credit.

When a lender looks at you and your business in consideration for a startup loan, he's going to look at your cash flow, as well as the collateral you put up. Most lenders will require collateral, which basically is their guarantee that they'll get their money back. If you don't pay, for whatever reason, the lender can get his money back by collecting the collateral. This is a big consideration when applying for a loan. Can you afford to put up your personal assets as collateral for a small business loan?

The last thing the lender will take into consideration is your own business expertise. Every lender is going to want to be sure you have the expertise necessary to run your business successfully. Without expertise, after all, you won't make any money, and without money, you can't repay the loan. Oversimplified statement, yes, but oh, so true.

Be ready to prove your expertise to any lender you talk to. This means you should have a business plan ready to show the lender, which should include not only an overview of what your business is and what it offers, but also your plan for marketing and expanding your business.

When preparing to apply for a small business loan, make sure you've got all this in place and you'll increase your chances of approval exponentially.