Preparing Your Business for the Funding Search (Getting a Business Loan)

Borrowing Money

"It is often said that small business people have a difficult time borrowing money. This is not necessarily true. Banks make money by lending money. However, the inexperience of many small business owners in financial matters often prompts banks to deny loan requests. Requesting a loan when you are not properly prepared sends a signal to your lender. That message is: High Risk! To be successful in obtaining a loan, you must be prepared and organized. You must know exactly how much money you need, why you need it, and how you will pay it back. You must be able to convince your lender that you are a good credit risk." -S.B.A. and The I.R.S. (Small Business Resource Guide)

Finding the Best Business Loan or Lease

It can be extremely difficult to find someone willing to give your business a loan or lease, without the proper credit profile. Before looking for a business loan or financing make sure you are prepared to present the offer to a lender. Learn what it takes to obtain the loan your business deserves in the following pages or our site. Learn how to:

• Prepare you and your business
• Develop a plan
• Put together a written plan
• Package the request
• Determine the type of funding needed
• Find the right lender

Prepare You and Your Business

• Have a favorable business credit score
• Have a favorable personal credit score (FICO or Beacon)
• Business trade references
• Business bank account
• Do the research on what type of loan or lease you need

Develop a Plan

• Have someone with good personal credit to sign for the loan or lease
• Determine what business structure to use before applying for the loan or lease
• Determine why you need the money
• Determine how much you need
• Determine how you will pay it back

Put Together a Written Plan

• Develop in writing an executive summary of the loan or lease your looking for
• Prepare a business plan
• Prepare a marketing plan
• Have two years financial statements and tax returns for the business and individually (if able)
• Almost any lender will want to see these three things before looking at an application

Business Credit Services™ offers an array of business planning services and products that focus on developing a high quality business plan for your company no matter your financial needs. If you are ready to develop a full-length, investor ready business plan, visit our business plan website.

Benefits of Leasing

Don't just focus on a business loan. In many instances a business lease may be more advantageous. Some of the benefits:

• No down payment
• Leasing offers the use of an asset, without the large down payment associated with ownership.
• The monthly lease payments under an operating lease are typically tax deductible.
• When leasing, you have the opportunity to preserve bank lines and working capital.
• Leasing enables you to replace outdated equipment with up to 100% financing including installation costs.
• It improves your cash flow, enabling you to gain more production and giving you a hedge against obsolescence.
• When you lease, you establish new lines of credit while generating a return on available cash and improving balance sheet ratios.
• Leasing also streamlines bookkeeping procedures,
• It expands your budget capabilities while avoiding costly financing delays.
• Leasing enables you to finance new machinery and equipment, or to turn presently owned equipment into cash.
• Replace technologically outdated machinery and equipment while preserving your cash and credit lines.

Packaging the Request

Before submitting any loan or lease request to a lender, you must have a package developed. The package must include what the lender is looking for. Each lender is different. We recommend using a professional who knows what each lender requires for their package and which lender meets your qualifications.

• Lenders want the loan or lease request presented in a specific manner
• Use a professional loan packager who has several lenders to shop your request
• The packager will provide the lender what they want to see and increase your chances of approval
• The packager will also save you time and money