Small business loan is financing for your business success.
Small business loan capital is one of the more common methods of raising financing for your business. A loan of this nature can be obtained through a standard lending institution like a bank or from the U.S. Small Business Administration (SBA). They help entrepreneur’s everyday by providing guaranteed loans. The qualification process for a small business loan from the SBA has become easier over the years.
There are factors that help determine whether your business will qualify for a small business loan. If your business has been fully operating for more than two years, you have fewer than 500 employees, you are independently owned and operated, generate annual revenue between $1 million and $20 million, and are in the manufacturing, wholesale, distribution, professional services, or retail industries than there is a very good chance that you will qualify for a SBA approved loan. These loans are guaranteed for commercial real estate purchases, equipment acquisition, working capital, and much more.
Preparing your business properly before going after a small business loan is essential. Having a business plan is extremely important, along with knowing exactly how much money you need for your business, and how those funds would be used. While you get those in place it is important that you also understand the importance of having established business credit scores.
They act like your regular personal credit scores as they determine the credit worthiness of your business. Make sure that you totally separate all personal credit from business credit. Apply for all business loans and lines of credit using your business tax ID number instead of your social security number. Also make sure that the lending institution you are receiving funds from reports your payment history to the Small Business Financial Exchange. Our Business Finance Coach includes more information on setting up business credit the right way.