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America was founded on the premise that men should live without tyranny from oppressive rulers and laws. It is a battle that never really ends. Tyranny has two equally dangerous and deadly sisters creeping into America’s ...
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Articles » Finance » Loans » Self Employed - Guide to Getting A Loan
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- Article Views: 288
- Word Count: 1024
- Date Contributed: Feb 09, 2008
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| Self Employed - Guide to Getting A Loan |
Anyone who has been self employed for any length of time knows how daunting it can be to apply for a business loan. Approaching your local banker for money, (isn't that what he/she is in business for?) is a humiliating experience to say the least. A banker sees you as unemployed not self-employed and is going to want you to do certain things to earn his trust. While it is difficult to get a start-up business loan without a proven track record, it’s not impossible.
Let's quickly examine a few steps you can take that will improve your odds for success when applying for small business loan.
Get Prepared Before You Start Bank Shopping
There are several agencies who will assist you in preparing for your banker meeting.
Community small business resources Counselors to America's Small Business – SCORE, mostly maned by retired professionals from the business community, offers personal assistance and such tidbits as:
Here is Five Tips for Writing a Business Plan For a Loan
1.Begin with a statement of purpose – a reason for doing. You should be able to explain your business in 25 words or less. Be bold but not arrogant in your declaration. Let him/her know exactly what you are doing.
2.Tell how your business will work and why it will be successful. List who will be responsible. Let the lender know you have direction and intend to follow it.
3.Supply pertinent business details such as a describing products or services, the customers, the market and the competition. Supply a marketing plan on how you intend to promote your product or service. Give experience and credentials of those who will be in charge.
4.Supply three years of past, personal financial statements and three years of projected financial statements. Include income, loss, and cash-flow projections. Be precise with a professional looking document. This demonstrates your stability and ability to product. The lender not only wants to know your track record he/she wants to know how you intend on fulfilling you obligation. Just ask yourself, what would you want to know about someone who you were about to lend money to?
5.Provide any supporting documents such as statement of intent, demand for service or product, record of past paid obligations such as care loans, credit card statements, mortgage payments, rent, etc. references from creditors and potential clients and suppliers, evidence of insurance and the like.
Small Business Administration – SBA aka Small Business Development Center (SBDC) can be very helpful when you are ready to seek funding for your business. Not only do they offer classes on how and what to do but they will also coach you on what to do and not do when approaching lenders because they have been there and done that many times before. They also can direct and recommend you to the small business-friendly banks in your area to help tip the scales in your favor right from the beginning.
Don't Discount The Internet For Valuable Information
There are also many very good web sites that offer valuable on-line assistance, manuals and courses which help prepare you for the meeting your banker. Some offer free ebooks, brochures, advise, articles, and other good helpful information.
Let Them Know You Will Give Them All Of Your Business
Assure your lender that you are prepared to meet the challenge and are a good risk. Move all of your personal and business accounts to the bank, so that they can see first hand how you manage your money. This will also give you a chance to check out the bank’s loan policies and gather up the forms before you get started.
Always Remember, Bankers are Human
Be cordial, get to know your bank’s staff including the tellers, loan officers and other employees. Developing trust in a friendly personal relationship with your bank is essential not only to help you get a loan, but also if something should go awry. Taking the time to build trust by getting to know your bankers is an important ingredient in demonstrating your “character”.
It's Best To Not Go it Alone
After all of your research and preparation is completed, it’s time to have give your presentation. Be sure to practice your proposal and take one of your mentors with you, be it your SCORE business counselor or SBDC advocate. Either or both can be invaluable as you meet with your loan officer and negotiate the loan. And, your lender will feel more assured as he/she is prompted by a trusted community business leader who has come with you.
There's Always Light At The End Of The Tunnel - When at First You Don’t Succeed . . .
Many aspiring entrepreneurs are rejected for funding—some several times before they succeed. The secret is, don’t give up. Your determination is an example of your willingness to make the venture succeed. Meet again with your SCORE business counselor to discuss a possible alternative strategy and approach your banker with the idea of amending your first preposition. Meet with other lending institutions until you find the right one who is sympathize with your needs. In the end, banks not only want your business they need it and will work with you to find a solution. The U.S. Small Business Administration has a variety of guaranteed loan programs for small businesses which may fit your business. Be sure to check them out. And, above all, be persistent.
You Can Do It.
In the end it will be your preparations, persistence, and performance that will make the difference between success and failure. The lender will see these characteristics as living proof that you will preformed as you have claimed. Isn't it true that the whole world is a stage and we are only actors? Do a good job and good luck.
Happy Trails
Donald Yates, Former Director of Business and Leadership Development for Imperial Research, is now retired but continues to assist young people in engaging life through self discovery, Life course planning, intuitiveness and fulfillment. Learn how you can build a powerful organization of your own. To learn more, visit
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