Business loans help business owners expand their business. Sometimes this can be done by expanding inventory, introducing new products or simply hiring more staff in the end it all cost money. Both small and large financial institutions extend loans (business loans) to business owners that fit their criteria. Now I won’t lie to you securing a business loan can be quite a task unless you have the proper blueprints laid out and know how to approach the lender.Unsecured Loan – This is a very popular type of business loan which is generally extended to business owners who have really good history (credit history) or an established business. Collateral is often needed when applying for these loans. Depending on your history and conditions it’s possible to obtain loans that range anywhere from $300-$20,000 within a few minutesSecure an Unsecured Business LoanAn unsecured business loan is very easy to obtain if your business have been established for at least 2 years and or your business is proven to be profitable. This says a lot to financial institutions. Your personal credit score has to be between 680 and 700 and you can’t have any record of bankruptcy within a 4 year time frame. It’s best to not have one on record at all. Late payments will hurt you so it’s best if you have none of these and your business bank account will also expedite the approval process.Secured Loans – The Typical ApproachNow with secured loans collateral must be given to the lending institution. The benefit with these type of loans is the ability to negotiate longer repayment terms and approval of much larger amounts. The typical range is $25,000- $1,000,000. There are some loans that will enable the borrower to take out a loan for a period extending 30 years. In this case the borrower can then pay at a fixed rate of interest or a flexible interest rate.Secured Business Loans- CriteriaThese are a must have if you plan of applying for a secured business loan or any kind of loan.
Before you even think about applying make sure you have the bullet info below covered!• Business Plan -You must have one doesn’t matter if you have legit collateral or not the lender will turn you down if you don’t have a proper sound business plan. They need to know where this money will be going towards/how its going to be used and how you plan on paying you loan back to them.
• Are You Honest and Pay Taxes -This is also something that speaks louder than you will. This tells the lenders how honest you are and it shows a stream of income which will backup how much the business earns.
• Projections – So the business plan looks good, it’s glowing the question that always comes up “what do you plan to do if your business yields results” so you better have a back up plan to save you grits. This question will be asked so be prepared!
• Are You Good With Money – Your credit history speaks much louder than you ever can so if you have a lot of dings in your credit report make sure you get all of this taken care of. It’s that vital it can make or break the decision.Last, make sure you research more than 5 financial institutions half of a % can save you hundreds of thousands of dollars in the long run.