The next step in getting a small business loan is to persuade the lender to give you a small business loan. You need to prepare in advance to make a winning small business loan presentation.
Start by considering the lender's point of view. You want money. But he or she is most interested in the answers to these two questions: "What are you going to do with the money?" and "Are you a good risk?", and to make a winning small business loan presentation, you need to come up with the "right" answers to these two questions.
Answering the first question means being fully conversant with all the details of your business plan and being able to point to the relevant financial statements, charts or graphs that will help convince the lender that you need the amount of money you're asking for to do what you want to do.
Answering the second question means having already given some thought to the credit risk you represent to the lender and being ready to address his or her concerns.
To get a small business loan, be prepared to tell your potential lender:
What collateral you have - Collateral refers to the tangible assets that you are willing to put up to secure the loan. These assets might be equipment, a house, a car - something of value that you own. If you fail to repay the loan, then the proceeds from the sale of the assets is used for repayment.
How much money you're personally willing to put into the business - Being willing to risk your own money shows the lender that you're committed to the enterprise.
Your expertise and/or experience in your chosen field - Because the success of your business is dependent on this to some degree, any potential lender will want to know more about you. Be prepared to talk about yourself when you apply for a small business loan - your background, your expertise, and even your aspirations.
Your chances of getting a small business loan will be greatly improved if you have all your documents in order and are prepared to assuage the lender's concerns about loaning you the money. Think of it as a presentation to an important client or customer, and you'll have a better chance of success.
