Entrepreneur's Jump Start: Small Business Loan Essentials

In order to jump start small business loan applications, prepare to sell yourself to a lender.

Prepare Before You Apply

You are a risk to the lender.  In your proposal for a loan, you need to prove to the lender that you are worthy of investment.  If you have good credit history, a past without defaulted loans, and proof that your business has a great chance to prosper, you become a lower risk. 

Your business plan needs to be complete and thorough.  Analyze the industry that you are entering, predict your cash flow, and determine your fixed costs in order to prove to the lender that you are knowledgeable and prepared.  

Determine which term loan you need.  Short term loans last less than one year and will help with managing immediate costs.  Intermediate term loans last from one to three years and will help you establish your capital.  Long term loans are best for start up businesses and provide money to build the foundation of a company.

If you have assets that you are willing to put up as collateral, go for a secured loan.  Secured loans are less expensive because you are much less of a risk to the lender.  Unsecured loans, which do not require collateral, are more expensive because the risk of you defaulting is higher.