How to Acquire a Bank Business Loan When You’re A Small Business
As many new business owners will discover, acquiring business financing from a bank can be difficult when you have yet to build business credit. Needless to say, bankers need a solid guarantee that the borrower will be able to pay back the loan on time. Without business credit, it would be hard to convince a lender that you will not be defaulting from your payments.
Nevertheless, there are some things that new business owners can do to improve their chances of getting approved by their banker. The key is building a good relationship with your bank to get the financing support that you need. Take a look at the following tips:
Apply from your personal bank. When applying for a business loan, it is a good idea to apply from the same bank where you opened your personal savings account. Since you are an existing customer, you are more likely to win an approval for a business loan. Of course, this would be true if you have a good record to prove that you are worthy of new credit.
Did you acquire a personal loan from your bank? If yes, then your bank may agree to provide you a business loan as well, especially if your payment history shows that you have been prompt in submitting your personal loan payments.
Apply for a business credit card. A business loan usually requires a significant sum of money so it may be more difficult to obtain. On the other hand, applying for a business credit card is a lot easier because less risk is involved.
Once you have been approved for a small business credit card, you need to manage your account responsibly. Avoid exceeding your credit limit and be sure to submit your credit card payments on time. This will show that you can handle credit and debt effectively. After six months, try to apply for a business loan from the same bank that issued your credit card for business.
Get in touch with your banker. It is true that financial challenges cannot be avoided and you may encounter difficulty in submitting payments on time, especially when you’re working on a limited budget. Nevertheless, you should never let circumstances damage your good relationship with your bank or lender.
The best thing to do in this situation is to speak with your banker. Let your banker know why you will not be able to submit your payment on time as you used to in the past months. Show your lender that you are doing your best efforts to keep up with your payment obligations and to protect your business credit.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2010.
Related Article: Borrowing Money To Build Your Business
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