Securing a small business loan from a bank can be a daunting task, especially since we are still in a time of great economic uncertainty. Banks and lenders will only approve loans when they are nearly certain that they will be paid back, which means they have to be reasonably confident that business will be successful enough to cover its expenses and still be able to the monthly loan payments. However, loans are the lifeblood of a small business, so if you want to have cash to grow, you need to do all that you can to make sure your business is bankable.
Start the loan process by contacting your chosen lender and schedule an appointment to discuss the loan. Locating a lender through your own personal network is always a smart move as it establishes trust early. You may also want to request a loan through the bank where you have your checking and savings accounts since they already have a record of your finances and financial responsibility.
Once you’ve found a lender and scheduled an appointment, your next step is to update your business plan. Your plan should reflect your current economic situation, your expectations for the growth of your business, and your future financial needs. You will need all current and projected financial statements, including a balance sheet, income statement, and cash flow statement. Package all of this information with your personal and business tax returns from the last two or three years. Submit all of this information before your appointment with your lender.
When it is time to meet with your lender, be prepared to explain in great detail how you plan to use the borrowed funds for your business and how and when you intend to repay the loan. The more information you can give about how you intend to make a profit and repay the loan the better your chances will be.
The length of time it takes to have a loan approved depends on many factors, but the process generally takes anywhere from one day to one month. However, stay in close contact with your lender, answer their follow-up questions thoroughly and timely, and stay patient. Before you know it you will have the small business loan you need to grow your company.
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