Small Business Loan Basics
January 30, 2018 |
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You have an idea for a great business. You know you’ve got the drive and know-how to make it a success. You just need the funds to get it off the ground. Put yourself ahead of the game by making yourself an expert on all the small business loan basics. Here are a few things to consider before you start filling out an application for a small business loan.
Who’s Going In with You?
Is this business all your own? Do you have partners or investors? Your eligibility for small business loans will be determined by several factors, including:
- The FICO score for each founding member
- How much collateral you have
- The size of your down payment
- Relevant business experience and/or profitability
It’s important to wrap your head around who you have on your small business team, and what assets you’ll be able to show a lending institution.
Who Do You Want to Bank With?
Choosing a banking partner can be just as important as choosing a business partner. Make sure you find a bank who supports your business and can help you as you grow.
Consider these things when evaluating banks and credit unions:
- Experience working with your industry or business niche
- Estimated loan amount you’re looking for
- Participants in the SBA Preferred Lender Program
- Pre-approval process
- Point of contact
- Interest rates
- Policies for collateral
Also check out what kinds of business lines of credit you can access with your bank, as an LOC can help you accelerate your business expansion when you and your finances are ready to go.
What else is important to you with a financial partner? Convenience? Technology? Keep a lookout for things like:
- Mobile banking
- Mobile deposit
- Online bill pay
- Business savings accounts