Business Loan – Obtaining the Right One

By editor
In Accounting And Banking
Mar 2nd, 2015

Small businesses are a great way to start a business and make some extra money. Once the business gets established, you can even go on to leave the job. However, starting a business requires quite a large amount of money and so you will be required to borrow, in order to be able to start a business. Even if you are trying to expand your business, in that case too you may have to borrow.

Business Loan

Applying for the right business loan

In order to apply for the right business loan, you will be required to:

  1. Get an estimate on the amount required – You need to estimate the amount required for your business. This is the first and the most important thing which you will have to decide and then go on to apply for the loan, with regards to your business. In order to estimate the cost of starting the business or expanding it, you would be required to make a list of what you would require, the items and more.
  2. Get all the financial statements – In order to obtain a loan, you will be required to submit all of the details of your financial statements. These will be your income statements, balance sheets, and so on. Past and current financial statements are required. The past ones will include everything for the last three years and the current ones aren’t supposed to be older than that of 3 months.
  3. Write a business summary – Obtaining a business loan would require you to write down a business summary. The lenders would check with the summary, before approving your loan application. This will have to be the executive summary which is supposed to contain information on your finances, business background, and description about the business, the amount required by you to start the business and so on.
  4. Get quotes on the business loans – It is important for you to get quotes on the business loans so that you can go on to determine which would be the better offer. Getting quotations and getting pre-approved for the installment loan helps a lot in obtaining the right loan at the right time.
  5. Create a loan proposal for your business – It is not only important to create an executive summary. You will also be required to create a loan proposal describing the purport of the loan along with the exact amount required. Depending on the lender, you may also be required to provide details on the legal structure, the marketing details and the position of the business. Whether your loan application is going to be approved or not will depend on the loan proposal you are going to create.

You will have to do the above in order to obtain the right business loan. In addition o the above, you will have to use a loan calculator so that you can get a clear idea on the cost of the loan. Loan calculators are available for free usage online and help you determine the level of your affordability and thus apply for the right loan too.

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