Read Articles:

11 Rules for Selling to a Skeptic
15 Construction Loan "Inside Secrets"...
20 Small Business Tips, For Success
7 Power Habits to Guarantee Financial...
A Few Thoughts on Securing a Bad Cred...
All About Stock Market
Applying for a Business Loan
Applying for a Loan
Are You Wealthy Yet?
Avoiding Home Business Failures
Building Wealth: Don't Waste Your Mon...
Business laws basics
Checklist for starting a business
Cheryl Rickman Interview
Credit Card Processing: Legally Beat ...
Don't Shoot the Sales Team
Exploding Six Sigma Myths
Factoring Financing: How to grow your...
Flipping Houses for Gold: How to Find...
Forex And Daytrading
Free Legal Advice
Getting a Small Business Loan
How to Become a Motivational Speaker -
How to offer 30 day terms the right way.
Importance Of Technology Changes In B...
Instant Unsecured Cash Loans - Tips
Joint Ventures: The #1 Business Start...
Locating a Bad Credit Mortgage
Locating a Home Mortgage
MAJORCA PROPERTIES
MALLORCA PROPERTIES
MBA basics
Mortgage vs. Real Estate Lead Generat...
Ten Crucial Questions for Your Busine...
The Dangers Of Get Rich Quick Schemes...
The Important Function of Shredders -
The One Key To Huge Online Success
The Procurement
There Are Tons Of Small Business Gran...
When Is The Best Time TO Take Your Co...
Why Your Projects Are Not Being Compl...
Winning in the Global Economy - Will ...
You May Have A Successful Small Busin...

More Article Pages 1

Small Business Loan Basics
 by: Joseph Kenny

Many people who wish to start their own business need an injection of financial capital at the beginning of a business; the main source of funding for entrepreneurs is business loans.

Let's take a look at what you should expect if you plan to apply for one.

First of all, you should know that most lenders have their doubts when it comes to lending money to a first-time business owner. You're considered a high business risk at this point, and you should go in to your loan negotiations armed with a few advantages. Of course, the ideal option is to run your business for a few years, even just out of your home, and turn a good profit before approaching a bank for a loan.

That shows that you have the ability to make money and that your business won't flop before the Open sign shows up on the door. But if this isn't possible, if you need the cash before you can begin at all, then chances are you will need to offer some type of collateral. Collateral can be anything from your car to your home and everything in between. Depending on the size of the loan, you may require some pretty hard assets for collateral. The lender is not interested in whether or not your business will make money, aside from the extent that will allow you to pay them back on time. They simply don't want to lose out on the loan, and so you'll have to find some way to back yourself up.

Backing up your loan with assets, if you have them, is a good route - provided you have enough confidence in your financial situation to ensure you are not going to lose your collateral. If you don't have enough assets to stand in for your loan, another option is to find a cosigner. Chances are you won't get as much cash as you would if you had the assets. But having someone with good credit who is willing to sign onto your loan and promise to pay if you don't can be the factor that gets you through the door. This is a good way for friends and family who believe in your business to help you get it off the ground, even if they don't have the money to loan you up front.

When it's time to borrow, do some comparison-shopping among banks and credit associations, and don't stop until you find the lowest interest rate possible. You're already gambling a lot here- minimize the amount you will have to pay back by doing your homework and choosing the company that offers you the best deal. If you can't get enough to cover your beginning business expenses, consider borrowing part of the cash from a friend or relative if you can, or even asking for investors, such as customers who believe in your business, to help out. Don't accept a high-rate, high-risk business loan just because it offers you the biggest amount.

The small business loan: The first step in a long chain of financial events. If you take the right step, it could be your leap into the business world.

About The Author
 

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find all the different loan types explained

 

 



©2005 All Rights Reserved