Many people think that small businesses have no need for finance as they don’t spend money, or they have no customers to sell to, or they aren’t able to generate a profit through marketing and advertising. But, this is just a myth! In fact, over 70% of small businesses have at least some kind of finance coming in from somewhere – whether it be their owner or a lending institution, or perhaps another source.
While there are many myths about small businesses that need no finance at all, a large percentage of small businesses do need to have a good source of finance. Small businesses with fewer than 500 employees make up over 48% of total American jobs, and almost 45% of annual GDP, so they’re facing an unprecedented existential threat as a result of the recent coronavirus scare.
If you’re a small business owner, then you probably want to know how to get started to get a small business loan, even though there are probably dozens of banks and lenders that will give you a loan on your own. What you really need to do is look at the big picture and plan your business in terms of profitability.
The first thing you need to do before you apply for a loan to start a small business is to make sure that you have everything that’s required to do so. For instance, you’ll need to show that you’ve got a working business plan – one that shows how much income you’re looking to get, how much cash you can generate in each month, and how much money you need to get in order to cover all expenses, both short term and long term. Don’t just sit down and write this up – you should also get a third party to look over it. This will allow them to see if you can meet their requirements.
Secondly, you need to understand that there are two types of small business loans available: secured and unsecured. If you have no collateral and your business isn’t worth anything, unsecured business loans will usually be the best choice, but if you do have collateral, then secured loans are sometimes the best option.
You can find all sorts of information on small business loans on the Internet, but don’t just rely on the first few websites you come across. Instead, use some of the big online lenders – like Fitch, Capital One or American Express.
Once you have your business plan done, take it to your local bank and let them know that you’ve found it online. And keep in mind that many of the banks are likely to be willing to give you a smaller loan.
So, there you go – now you can apply for a small business loan even if you have absolutely no idea how to get started, and it will be a lot easier than it used to be. The bottom line is, start today and start using small business financing right away!
If you’re worried about not having the time to work out a business plan or the money to get started, you could always look into getting a small business loan from someone else. You can look through the yellow pages or even on the Internet – there are many options to help you with this.
Just make sure that you understand what it is that these different people are offering – there are lots of different companies out there who are willing to help you. You just have to know where to look.
You could also look online and see what companies and banks are currently offering loans for small businesses – you might find some that specialize in this kind of business. It might even be something that you want to consider – after all, you could be setting up your own company in the future.
It will be very important for you to choose wisely when it comes to choosing the right lender when it comes to small business loans. Because you’re applying for a business loan, you don’t want to end up being scammed. Don’t just jump in and get your hands on as many loan options as you can, but you also don’t want to get stuck with bad business financing deals either.