How to Get a Business Loan in Five Steps

Need funds to startup or expand your business? Follow these steps:

A lender looks at a loan request in three sections known as the "three C's". They are:

• Credit. Did you pay previous lenders back as contracted?

• Capacity: Can you afford to pay back this loan?

• Collateral: If you don't pay back the loan from what asset can the lender recover their principal?

Step one is:

1. Identify your strength and weaknesses in the "3 C's". Do this as would a lender - with a very critical eye. Identify your loan to value ratio and your debt service coverage ratio. If you have reason to believe that you credit is less than sterling, get a copy of your credit report including your credit score

Each lender has different criteria with the cost of the loan being higher as your strength in the "3 C's" is lower. Step two is:

2. Identify lenders who lend to your level of borrower and to your industry type. Call lenders to get their criteria. Learn about the SBA 504 program and 7A loan guarantees. Find who others in your industry have used for financing.

If there is a gap (not a canyon, just a gap) between your borrowing ability and lenders criteria, a loan broker may be able to help. They spend their working hours finding second and third tier (more aggressive and more expensive) lenders and establishing relationships with them. They can act as a salesperson for your project in ways that you as a principal cannot. Step three:

3. If you cannot find lenders on your own, consider hiring a commercial mortgage broker. Be careful - in many areas there is little or no protection under the law for commercial transactions. While a small upfront fee for out of pocket expenses is reasonable, shy away from any that want large upfront payments. If they can do the deal they will be paid very well at settlement. If they can't do the deal they shouldn't be taking your business at all.

Once you identify a list of potential lenders or hire a broker, get prepared. Do not think that the business loan process is merely a matter or forms and paperwork. While there is more paperwork than you'd ever want to see, it is more of an inquisition. Step four:

4. Be an expert salesperson for your project. Obviously, we think that your should use FundablePlans.com to build a written proposal. Whatever method you use, know your numbers and be able to defend them. Understand your market and be able to speak competently about it. Know your competition. Most importantly, (from step one) know your strengths and weaknesses as a borrower and be able to maximize the strengths and minimize the weaknesses.

If you are successful with steps one through four, you will expect to "hit a home run". You may, but most likely you won't. Step five:

5. Don't give up. Where one lender might have too many loans of your type in her portfolio, the next may need exactly your loan to meet his goals (loan officers are paid to lend). This is not to say that you should "beat a dead horse", but if you have a viable project, a good presentation and good "C's", you will be able to get financing.

Good luck with your project, if you have questions about funding feel free to use the e-mail link below.

About The Author

Dave Miller is a business consultant and the creator of FundablePlans.com, an online business plan builder at http://www.fundableplans.com, dave@fundableplans.xom

---

Seven Tips For Credit-Enhancing Your Business Loan

What are the avenues available to businesses with weak credit... Read More

Can A Pay Day Loan Truly Be Easy?

If you're looking to find an easy payday loan it's... Read More

What is an Unsecured Loan?

An unsecured loan is a personal loan where the lender... Read More

Is Getting A Personal Loan With Bad Credit Impossible? Think Again

A bad credit history is like having contracted an infectious... Read More

Bridging the Gap ? through Bridging Loans

You were on your regular walk with your wife, and... Read More

A Guide to Getting a Debt Consolidation Loan UK

If you're getting in over your head with credit, you... Read More

Online Payday Loans Offer Quick or Instant Approval For a Fast Cash Loan

Online payday loans companies offer quick approval with their online... Read More

Christmas Loans ? A Gift on the Occasion of Christmas

It is still a few weeks to Christmas and every... Read More

Finding and Getting Bad Credit Loans

If you don't know where to turn for bad credit... Read More

Taking the Time to Find a Homeowner Loan UK

Trying to find a good homeowner loan UK can end... Read More

Fast Cash Advance Payday Loans - Convenient to Use Online

Online cash advance companies offer a convenient and speedy application... Read More

Finding the UK Loan that You Need

Because it can sometimes be difficult to find a UK... Read More

Benefits of a Home Improvement Loan

Some of the many benefits of a Home Improvement Loan... Read More

What is a Commercial Business Loan?

A commercial business loan is designed for a wide range... Read More

Steps You Can Take To Protect Your Financial Information and Personal Identity From Fraud

Financial fraud and identity fraud are one of the fasted... Read More

Finding Good Loans for Bad Credit

When looking for loans for bad credit, many people find... Read More

What is a Personal Secured Loan?

A personal secured loan is the generic term for a... Read More

Student Loans Are The Life Preserver Of The Education System

A loan is the reason many students are able to... Read More

About Personal Loans

What are personal loans? They are unsecured loans that a... Read More

Secured Car Loan - if Car Signifies a Second Home to You

Cars ? they are your passion, necessity, luxury, earning member.... Read More

Loans For Unemployed - when your personal economy slumps during difficult times

The latest IDS figures for unemployment the claimant count measure... Read More

Short Term Payday Loans - Use One Online To Get Cash Quick

Short term payday loans are now available online. After filling... Read More

What To Consider Before Applying For A Loan

Here are some useful tips on what to consider before... Read More

What is a Loan?

A loan is money that you borrow and agree to... Read More

A Beginners Guide to Low Interest Debt Consolidation Loans

Looking for low interest debt consolidation loans can sometimes seem... Read More

Instant Payday Loan and Instant Payday Loans

Instant payday loans are financial loans that are available for... Read More

Holiday Personal Loans ? When the Traveller Within You Wants to Break Free

If you are a traveller by heart then perhaps every... Read More

Secured Personal Loans - What You Need To Know About

Loans that are secured against property are called secured personal... Read More

Understanding Secured Loans

A secured loan is any loan that is secured on... Read More

Payday Loans ? The Legal Loan Sharking Industry

Laws have been created to protect people against "Loan Shark"... Read More

Hidden Bank Loan Charges That Would Make a Pick-Pocket Envious

There can be more to a bank business loan than... Read More

Loan Basics

There is more than one type of loan. Depending upon... Read More

Taking the Time to Find the Best UK Loans

When looking for UK loans, it's always important to take... Read More