Taking Out a Loan for Small Business -- What It Takes

Whether your business is pre-startup, start-up, or operating, taking out a loan for small business can help you finance your venture. The process of taking out a small business loan can be confusing and time consuming, but preparation is key to getting approved. 

Before You Apply

Before you apply for a loan, you should prepare to sell yourself and your business to a lender.  Know your facts so that you sound reliable. 

  • You will not be able to get a loan to finance your entire business, in order to get money you have to put up money.  
  • The government does not supply small businesses with loans. 
  • The lender will ask you what the loan will be used for, how much money you need, when you will pay the loan back, how you will pay the loan back, and what you will use for collateral.  

Loan Proposal

The first thing that your lender will see is your loan request proposal.  This includes a statement of purpose, your business plan, and your financial statements.  The point of the proposal is to convince your lender that your business is a good risk.  Prove that your history of repayment is solid and that your cash flow is, or will be, good.  Demonstrate that your business has the ability to stay afloat and that you will be able to repay the loan for small business.