Obtaining a Business Loan

You need more than ambition to make your new business a reality. You will need to find out a source of funding. You can try investors, borrowing from friends and family or getting a loan from a bank or credit union. The bank or credit union is preferable with most new entrepreneurs but how do you prepare for presenting your plans to a financial institution? The biggest mistake many new business owners make is being unprepared not to mention that many business owners don’t really know how much they need in the way of funding. To make sure this does not happen to you here are some helpful tips.

Have A Good Business Plan A business plan is your business’ road map. It shows how you will focus your business, what goals you have set and how you will fulfill these goals. It also shows the funder that you have thoroughly thought about the financial picture of the new business in the first 3-5 years of operation and how you plan on making it a financial success that will in turn allow you to pay off your financial obligations.

Show Your Long Term Goal Just saying you want to make money will not get you a loan you need to show how you will make money by showing well thought out financial targets that are realistic and achievable.

Documentation Besides the business plan you will need bank statements, tax returns, incorporation information, licenses, pertinent certificates and information on any patents or trademarks you may have.

Talk Dollars You should thoroughly know your business plan and be able to explain it easily. Your funder will want to know about revenue streams, monthly costs, start-up costs, staffing and payroll, equipment needing to be purchased, supplier information and how much you plan on investing in the business. Funders always look at what’s in it for them. For this they consider risk, return and your ability to regularly pay back the loan.

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