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The Challenge of Obtaining a Business Loan

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January 29, 2008

The Challenge of Obtaining a Business Loan

By Brian Solomon, TMCnet Web Editor


One of the most difficult tasks facing small business owners is the challenge of finding the money to operate. Taking the steps to prepare for a small business loan can minimize this difficulty. There are several things you need to know in order to clinch the loan deal.

Banks and other lending institutions point to risk factors as the main reasons for rejecting small business loan requests from startups. Still, proper preparation can still help you get a loan for your business.
It is important to avoid the common mistake of thinking you can start with government grants or grants from community agencies. That is even more unlikely than getting the money you need from your own savings, from family, friends, or a bank.
The main requirements for getting a small business loan are your own personal credit history, business plan, education, experience, and the feasibility of the business you are starting/expanding.
In the process of obtaining a small business loan, it is crucial to prepare a business plan. This business plan needs to show the lender that providing you with a business loan will be a low-risk endeavor. The business plan should answer the questions a lending institution would ask, such as, “How much money do you need?”, “What are you going to do with the money?” and “When will you repay the loan?”
As a small business owner, you are going to require a certain amount of fortitude. Be confident of your venture, and let lenders know that you are in control, that you know what is best for your business. If you don't get one, don't be discouraged. Ask the lender why you didn't get the business loan. Learn from the answer, keeping going, and try other lenders.
Brian Solomon is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To see more of his articles, please visit Brian Solomon’s columnist page
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