Getting a small business loan from a bank

There are numerous ways a business can get a loan to have it off its feet; however not all those ways are safe and healthy. With online ventures seeming too risky at times when giving personal information or too slow, a person can easily want to turn to family and friends. However family and friends might help and give the money to the venture in the name of no interest paid, problem comes in if there is an emergency and they want the money back promptly, thus the need to get a loan from a bank.

Business plan with budget

No bank can offer a lending to a business regardless whether it is large or small if it does not have a business plan. A business plan is key as it shows the bank clearly what the vision and the way forward of the business is. However when giving an over view being too optimistic will just make the loan request be reject. Instead show how the business intends to use the money given to create just enough profit to pay back the loan and continue moving on.

Business financial statements and business return tax

If the business has been operating for a while, its financial statements are key to getting a small business loan. This way the bank can clearly see the profits, losses and the clients that the business has. Business return tax should also be presented into be looked at by the bank. Showing that the business pays its debts to society, the bank will be more willing to give the money needed. If the business is business is making losses clearly show what is intended to be done to make a turn around. If it’s making profits show why it needs the money together with the business plan

Personal financial statements and personal return taxes

Personal financial statements and personal return taxes by the business owner are also a major requirement by the bank. This shows the credit history and the ability of the business owner to pay for the money if the business does not succeed. However if the credit history of the business owner seems to be bad, the bank might ask for security as collateral if the business will not be able to pay. Thus the business will be more likely to get the small business loan it requested.

Go to the right person

A bank usually has very employees and as such specific ones tend to deal with loans for small businesses either startups or capital for expanding. Stepping into the bank dress professionally and have all the needed statements and business in place, this way the business proposal is likely to get looked at. However even though the business might have everything in order some banks might still find it hard to give lending for small businesses, thus the need to go to another bank and another bank until the right bank goes through and gives the small business loan required.

In the event that the small business loan is approved the business and the bank should come to an agreed period of time that the money should be returned to the bank. Thus enabling the small business grows without the worries of losing everything.

Small Business Lending - Options and Benefits

Small Business Lending happens when money is provided to a small sized business by a lender, usually a financial institution. It is particularly important to notice these loans usually have less restrictive requirements than other type of credit, this way the business can acquire these funds in an easier way. A credit of this sort usually provides many incentives to the borrower which in turn may lead to minimizing expenses. Not every type of lending is equal, for this reason I will mention some of the most important ones next.

1. Options for short term credit
a. Credit line for businesses: A source of funds easily accessible in the form of operating capital.
b. Business overdraft credit line: A line of credit which you can access through your checking account.
c. A credit card for business: Convenient credit for the everyday spending needs of a business.
d. Loan in installments: Funded capital which considerably improves and optimizes operating capital.

2. Options for long-term credit
a. Term loan: This type of credit helps you when purchasing capital goods or when you want to consolidate commercial debt.
b. Real estate financing: This type of loan removes the many uncertainties of rental or leasing when it comes to buying, building or refinancing a property which will be occupied by the owner.

3. Options for leasing
a. Traditional lease with option to buy at the end of the contract terms.
b. Rental of motorized vehicles: This loan is particularly designed for vehicle rental along with trailers for use on the road. Conditional sale agreements also function as loans.

Do you have doubts about the best option for you and your business? In this list you will find all the most important information to make sense of this important part of the world of finances.

4. Options for commercial finance

Letters of credit: These financial tools help to facilitate payment of goods in international trade agreement or to guarantee the payment obligations at a national level.

As you can see in this comprehensive list of Small Business Lending options you will find and understand some of the most important elements when it comes to commerce and the financial world. The article wouldn't be complete if I didn't mention some of the most important benefits; I will present them next:
1. They are convenient and accessible
2. Lower rates of interest
3. Many tax benefits

Now you can see why the economy can grow at a healthy rate, services like this make it possible for the country and the world to prosper.

Where You Can Get a Small-Business Loan

With a good business plan, or with a small business that you want to expend, needlessly to say, you need some funds. Getting small business loan can be relatively easy or very challenging depending on various factors such as the length of time you have been into business, the amount of funds you need, the geographic location, the ability to provide collateral, your credit score, the viability of the business idea, whether you are looking for equity or debt financing.

Types of financing.

For a small business start-up, the types of financing available usually are limited. If you don't have another performing business, financing options are usually limited to the ability and willingness of family members and/or friends to make loan, or your credit scores and assets when dealing with banks and other lending institutions.

SBA Assistance.

Small Business Administration (SBA) usually makes a few direct loans, but will only guarantee 85% of credit union or bank loans for entrepreneurs who need small business start-up money. This can be the best option because the loan directly applies to the new business. Getting SBA guarantee makes it easier for small business owners to get bank loan, but you have to pledge assets such as automobiles, bank accounts and home as collateral. If you are able to secure SBA guarantee, the interest rate and the repayment terms will be decent, and will help you to start your small business economically.

Credit unions can also be an excellent choice; they are small institutions and you can talk directly to the higher managers to plead your case.


Bank can also provide loans to small business, but you have to prove that you are worth the money. You need to prepare your document including the very important business plan, your credit history is also very important if you have are starting or you have not been operating for long period. Don’t forget the financial statements for the business because you will have to prove business's financial health; they will use to prove how much you are worth. It is also very important to prepare detailed projection of the income you are expecting from the business after the funding. Ensure your business plan is up-to-date.

What if you cannot get small business loans from such institutions?

If you can't secure loan from such institutions, you should not harbor hatred to yourself, this is often the case for most small business . You can source for small business lending from:
Your family and friends.
Small loans from credits cards.
Your retirement account such as 401(k) plan.