A Business Loan is a loan specifically intended for business purposes. As with all loans, it involves the creation of a debt, which will be repaid with added interest.
Small Business Lending Fund – Established by the Small Business Jobs Act of 2010 (the Act), the Small Business Lending Fund (SBLF) is a dedicated fund designed to provide capital to qualified community banks1 and community development loan funds (CDLFs) in order to encourage small business lending. The purpose of the SBLF is to encourage Main Street banks and small businesses to work together, help create jobs, and promote economic growth in communities across the nation.
All Financial Institutions offer different products for their Small Business Customers. Since Businesses have different banking demands, Institutions have different guidelines for Checking Accounts as well as Lending. A “Bank Loan” is obtained from a Financial Institution and may be either secured or unsecured. For secured loans, Financial Institution’s will require collateral, which may be lost if repayments are not made. The Instituion will probably wish to see the business’s accounts, balance sheet and business plan, as well as studying the principals’ credit histories.
With Business Lending you also have the options of a Loan versus a Line of Credit. The rules are the same as mentioned in my previous story on Consumer Lending. Please reference to catch up! Another story to follow up on will be Credit 101. Even though you are Lending against your Business you are the account holder, and have to be credit worthy as well. If you have not figured it out already, having a satisfactory credit score is extremely important.
- Strong Credit
- Compelling Resume – How long have you been in the industry? Depending how much you are looking to borrow and the purpose, the more established you are the better
- Solid Profit & Loss Statement – This will show; Professionalism, and Reliability
Research the Financial Institutions in your area. Many companies specialize in Small Businesses and the perks are worth the research!