Business Loans - 10 Pre-requisites to secure Lender Financing

Obtaining a business loan is an important step to either starting, buying, or growing a business. Typically, small business loans are through a bank lender with an SBA guarantee. Remember, the Small Business Administration does not loan money. The bank loans the money and the SBA provides the lender with a guarantee that they will pay the loan back, if you cannot. This gives a bank confidence to make more loans.

All lenders are not equal. Banks specialize and have certain areas of expertise, so look for one that works in your industry with your size business. If you already have a relationship at a bank and have established a business bank account that is a good place to start.

In order to get your loan approved you will need to provide the following 10 items, so be prepared. 

1.      Good Credit and good Character.

2.      Two years of Personal Financial History (tax returns)

3.      Relevant Industry Business Experience

4.      Ability to contribute 10 to 20 % of the project value

5.      Willingness to provide collateral (home, property, co-signer…)

6.      A formal Business Plan

7.      Three years Financial Forecast

8.      Investment and Spending details

9.      Relevant business financial documentation

10. Ability to pay upfront fees