BUSINESS LOANS

Small business loan applications require more then simply dotting Is and crossing Ts Too often entrepreneurs and established business owners forget that when you walk into your bank you are entering the world of your friendly neighborhood commercial lender But if you want that lender to remain friendly and open to your needs you have got to remember that when you walk in you enter his her world and leave yours far behind. Finish filling out your business loan application before your appointment Check it twice and be legible Doctors can get away with illegible scrawls but you cant Anything that has to be translated wont help your case Use online forms whenever possible or have someone else fill them out. Use a checklist to make sure you have all the supporting paperwork before you go Forgetting a key part of the loan application will not win you any points and slow the process. Business loan applications are legal documents and you can be held liable for making false statements on them under certain circumstances If you fib it can come back to haunt you Since the loan officer uses your application to evaluate your loan worthiness and should he she approve it and later discover that something wasnt as you said it was you can forget about ever doing business again with that bank and your credit rating may be ruined .It is easy today for banks to run checks on your claims at the click of a button Databases abound with information about you everything from education employment residence and credit history Make a falsified claim and it can and will be discovered. Things change Update these important documents at least twice yearly Commercial lenders like to see what you have done and where you are going in a nice logical progression Dont fudge on facts. Most banks and other traditional lending sources are understandably reluctant to provide small business finance especially a startup Even businesses who have established that have only been around for a few years may find it difficult to obtain necessary financing Small businesses are risky investments and the selection criteria for lending from these institutions is strict and most times unyielding Banks rely upon stable histories and ontime payments to vendors and other credit criteria that a small business owner often cannot provide due to the ups and downs of the business cycle If your business is less than five years old its still considered a risk by traditional bankers unless you are wildly successful Most small businesses dont fit this criteria but need financing to expand and ironically fit the criteria lenders are looking for If outsourcing your financial needs at this stage of your business life is not possible take heart you can still obtain the small business financing you need.When you approach the subject of small business finance youll still need to know the state of your business If you havent written a business plan now would be the time to do so because writing a plan will force you to think and evaluate your business in ways you may not have done before A business plan will force you to think like a banker when assessing your businesss capabilities You have got to determine how much ready cash you have to invest in your expansion Those sources you approach for loans or investment in your business will want to know how much you have personally invested in it If you havent risked enough of your own funds dont expect others to cough up ready cash even if you have developed the best widget on the market. Relationship financing is probably the most widely used but most dangerous form of small business financing because it involves enlisting the aid of family and friends While family members and friends may be more forthcoming and wiling to aid you in your financing needs the risks of failing to repay has grave consequences for relationships. Relatives can be especially harse should you fail to meet your obligations broadcasting unceasingly to other family members about how you screwed up Nothing can destroy a friendship faster than a failure to repay a loan No matter how understanding your friends may be money is money a separate issue from friendship The difference between family and friends is that while family members never let you forget they will allow you to attend family gatherings Friends may sever the relationship At the very least the relationship may be permanently damaged. One of the more common types of financial lending that is extended to businesses, the bank term loan is a certain type of loan that involves a fixed maturity and an amortization of the principal amount of the loan. Bank term loans may be used to establish a line of credit that the business can draw upon as needed, or be provided to the company in a lump sum, just as any type of bank loan. Here is some information about how the bank term loan works, and why this particular loan process may be advantageous for a business.

Using the process of a bank term loan to establish a line of credit is perhaps the single most common application. Businesses that want to be able to demonstrate financial stability can choose to create this sort of credit line as a means of providing an example of just how secure the company happens to be. There may not be any immediate financial need on the part of the company. However, the creation of a line of credit via a bank term loan makes it possible for a company to respond quickly to chances for acquisitions or other means of expansion without being slowed down by the approval process of obtaining any other type of business loan. This means there are funds on tap whenever they are needed. The company can move swiftly to take advantage of an opportunity without having to dip into the operating capital to do so.

In other cases, a bank term loan can provide the necessary funds to keep a company going during a slow period. A company that experiences seasonal peaks and valleys in the demand for their products is a good candidate for a bank term loan. With a demonstrable performance record, it is easy to establish a bank term loan that will come due during the period when a high volume of revenue is received. In the interim, the funds from the bank term loan can be used to keep the operating and other expenses of the business paid and up to date. From this perspective, the bank term loan is an ideal way to get the best financial arrangements that meet the needs of the company.

Bank term loans have been the means of assisting many companies to grow, as well as allow continued operations during a temporary but anticipated slump. As one of the most common types of loans on the market, banks often offer competitive rates for a bank term loan. Any business that is thinking about the possibility of taking out a bank term loan would do well to shop around for the best rate and conditions possible.