No business can function without the presence of money. In fact, finance is the life line of every business undertaking-be it small, mid-sized or large. Money is undoubtedly the most important element needed for starting up and running a business, however for a fact not every entrepreneur has enough funds of his own to bring a business into existence and run it smoothly. This is exactly the situation where business loans come to their rescue.
The 7 steps
The idea of taking a small business loan might seem intimidating to a number of people because obtaining a loan is generally considered a tedious project requiring a number of cumbersome steps and procedures.
However, thankfully there exists more approachable and easy to follow ways for obtaining loans. In case you are desirous of getting a business loan anytime soon then, you need to follow the below listed 7 steps in order to get easy finance for your business:
How much of loan you require?
The very first step of obtaining a business loan begins with making a calculative decision about the amount that you want to borrow. Cash might be the most important asset for your organization, something without which your business can’t survive but a rough idea about how much you can borrow is imperative.
Decide on the type of loan
In the past 5-10 years, the banking and financial industry has grown tremendously and there is literally a flood of various kinds of loans. From small business loan to asset loan and from business expansion loan to service loans, there are plenty of options for you to choose from. Thus, you need to make an informed decision about the kind of loan you want to take for your business.
Choose your lender carefully
When it comes to the task of obtaining a business loan, every businessman must use his wisdom in choosing his lender. There are ample of financial institutions, banks and credit agencies that offer easy loan options to businessmen but not every lender would prove to be your ally in times of distress.
Be prepared for the formalities
Obtaining a loan requires undertaking a lot of paperwork and formalities which might put some of you off. Different banks/institutions have different set of formalities when it comes to the question of giving business loans. So our word of sound advice would be that you must make yourself cognizant about such documentation and paperwork beforehand in order to avoid any bitter experiences later on.
Collateral plays a huge role while determining your eligibility for obtaining a business loan. Business loans having a low interest rate are generally secured by various types of assets; however the unsecured loans having high interest rates need no security at all. So, a businessman needs to be in possession of sufficient collateral for getting a business loan.
Get a credit rating
Getting a credit rating for your business from a reputed credit rating agency will surely help you obtain a loan having better terms and conditions.
Beware of the loan fees
Presence of exorbitant loan fees makes business loan quite unattractive and this is why we suggest you to inquire about the same before approaching any bank or financial institution.
Where do i apply?
You can apply with your bank or use on of these private lenders below:
KABBAGE.COM – #1 Online provider of small business loans. Kabbage puts the power of business growth back in your hands by giving you convenient access to working capital.
Enjoy ongoing access to your line, and take the funds you need day or night. Pay only for what you take and draw against your line as often as once a day.
Select the amount you need and they’ll deposit working capital directly into your bank or PayPal account. No waiting in line.
Requirements: 1+ year in business & $50K annual revenue.
Lines of credit from $2,000 to $100,000.
A+ Rating with the Better Business Bureau