Financial crises of last 2 years have made small business companies to struggle for survival. To get a small business loan has become almost impossible. During recession time many companies have found themselves in dire need of infusion of additional capital to run their business. There are various needs like expansion of existing structure to accommodate new equipment, making inventory for seasonal sales, or major repairs of premises and equipment for which you would like to get small business loan. But the exercise for obtaining a loan is extremely frustrating.
You should first estimate how much amount you need in the form of a loan. Whether you want a micro loan, which ranges between $5,000 to $30,000, or bigger amount for buying major assets like building or acquisition of land. In this case you can ask for development financing. If you are in export and import business you can apply for import export loan.
Before applying for any type of small business loan you must verify whether you are entitled to get a loan under U.S. Small Business Administration (SBA) Program. To get a small business loan you have to do lot of paper work and fulfil many conditions of lender. Lenders avoid taking risk in grant of a loan if your credit worthiness is below their norms. They scrutinize your business plan in great detail to confirm that you are quite capable of running business successfully. Business plan has to accompany personal financial statements, tax returns and many other documents to judge your repayment capacity and reliability.
Many lenders also consider how much personal capital you have invested into your business. They expect that your self investment should be minimum 20% of amount you apply for loan. It is better to be well prepared with all the documents and information in advance to get a small business loan with minimum hassles.
