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June 13, 2018
Unbiased Financial Information Provided by Financial Finesse
Most businesses need outside funding at one time or another. Even if you don't have wealthy relatives or rich (and generous) friends, you can still get the money you need to keep your business rolling along. Since gaining new credibility as the cornerstone of American commerce, small businesses have been receiving more support from the government and the financial industry.
Many Options If You Turn to Traditional Lenders
Possible sources of small business loans include credit unions, banks, commercial finance companies, venture capital firms, local economic development companies and equipment leasing vendors. With so many options, it helps to narrow the field.
A great way to focus your search is by getting referrals from other businesses. Where do your competitors borrow from? Going with a lender that understands your business can make the application process go more quickly and smoothly.
You can also try the most obvious option: visit a local credit union or bank. You'll have better luck and a more supportive relationship if you work with a local entity that is already familiar with your business and its place within your community. If you have your personal or business checking and savings accounts with them, all the better.
Or, as thousands of businesses do each year, you can turn to your local Small Business Administration (SBA).
SBA Supports Small Businesses
You're in good company when you take the SBA route -- such renowned companies as Federal Express, Intel, Nike, Apple, AOL and Ben & Jerry's started out with the SBA loan guaranty program, which imposes far less stringent borrowing requirements than the ones you'll have to meet for your typical lending institution.
One of the following SBA loan programs may be right for your business:
If you're interested in getting help from the SBA, contact your local office. Entrepreneurs can also visit Business.usa.gov for help finding seed and venture capital financing.
The Loan Process
Unless you're borrowing from parents or friends, you'll have to show how much you need to borrow, how you'll use the loan, and how you plan to repay the loan. In most cases, this is done as part of a well-documented business plan.
Some of the accepted reasons for borrowing include:
You should also be prepared to complete your end of the paperwork, including:
You don't have to let your business dreams die on the vine just because your financial account can't accommodate your plans. There are a lot of lenders that would love to help you become the next small business success story. All you have to do is ask.