June 16, 2009
The key to getting a small business loan is preparation. First, gather together the documents that will help persuade the lender that a small business loan is necessary and that you are a good risk. You will need: 1. A business plan - The business plan shows the lender not only why you want a small business loan but what you plan to do with the money. 2. Cash flow projections- What's the first question any lender has? Will you be able to repay the loan? Your business's cash flow projections give lenders concrete financial data that they can use to assess this risk. 3. A statement of your personal financial status- A list of your personal assets and debts to give the lender a fuller financial picture. 4. Past business tax returns - If your business is established and you have past business tax returns, it's a good idea to take them with you. They'll give the lender a better idea of how your business is doing financially. 5. A credit rating report - Basically, you establish a credit rating by buying things on credit and paying back the money you owe. Your loan repayment history plays a big part in establishing your credit rating, but all your "credit" dealings make up the history that's used to determine your credit rating. 6. What collateral you have - Collateral refers to the tangible assets that you are willing to put up to secure the loan. These assets might be equipment, a house, a car - something of value that you own. If you fail to repay the loan, then the proceeds from the sale of the assets is used for repayment. 7. Your expertise and/or experience in your chosen field - Because the success of your business is dependent on this to some degree, any potential lender will want to know more about you. Be prepared to talk about yourself when you apply for a small business loan - your background, your expertise, and even your aspirations. The Chamber has many members who are banks, willing to help you and your business during these tough times and a program through the Business Resource Center (BRC) called the ACCESS Loan Program. The Chamber also offers nineteen college-caliber online courses in Money, Marketing and Management as part of SmallBizU. Two of the courses, “Creating a Loan Package” and “Crafting a Business Plan,” will help you get that loan. For more information, please visit our Web site at www.gainesvillechamber.com and click on “Chamber Services,” "SmallBizU" or call Tim Ledvina at 352.334.7105 x323.