How To Get Loans To Start Business
Do you need money for your business startup? Are you looking for where and how to obtain a loan for your business? Obtaining loan for business can be a long, boring and emotional process. Yet, knowing fully where to get one can help you out to make the best decision that suits your business and/or financial needs.
This post includes the most reliable and comfortable places and how to get a business loan. Also contained therein are the pros and cons worth considering before entering and signing the transaction form.
Whether you are looking for an Agric loan to start a business in agriculture or you need more money to expand your dry cleaning business or other small-scale businesses and medium enterprises, assessing and getting loans for business without collateral is very simple if you follow these tips.
==> RELATIVES AND FRIENDS
You can easily get small finance from your friends and family members. This is because people find it easy to part with a little amount. Instead of asking an uncle to give you a loan of 1 million, why not draw up a list of people who can easily get you ten thousand so that the money can add up.
==> MONETIZE YOUR SKILLS
You can translate your talents into money to raise capital for business. Everyone has a unique quality can be converted into cash if you develop it first. Take your time to look inward so as to discover yourself.
==> PERSONAL CONTRIBUTION
Daily, weekly, biweekly and monthly contributions can help you in securing a loan. Whether your savings is with an individual or a corporate body such as co-operative societies (CICS), the assurance that you have a stable source of income to service the loan will assist you in securing a loan even if it more than what you have saved. Examples of organizations where you can save towards securing a loan include UBA, FirstBank, StanbicIBTC and AB Microfinance. To obtain a loan from AB Microfinance, you will need to open an account with them and run it for a minimum of three months.
1. National/Commercial Banks
One of the safest and the best place to obtain for business is national banks. The US Bank, Capital One, Wells Fargo and the likes are the big names bank that most successful entrepreneurs patronize time to time for their business loan programs.
Why do you need to obtain a business loan from national banks? Because big name banks will give you dozens of options! Ranging from the terms, incentives, fees, and many more, you are likely to find a loan that suit and work for your business. Plus, brand name banks also set up convenient and easy feature like online bill payment and may also have standby customer service to assist you 24/7.
2. Credit Unions
A credit union is another place where you can obtain a loan for business. Credit unions are fast becoming popular alternatives place to obtain business loans. The finding shows that on average, the credit union offers borrowers lower rates than that of banks.
3. Online Lenders
Need where to obtain a loan for your business? Why not go online? It’s no surprise that online banking is now becoming the norm and seeing the light of the day.
It’s fast, simple and you don’t have to do much than to fill in your information and exercise patience for approval. Also, it is a good place to go for a business loan if your credit card is so poor. Majority of these online lenders are set up in a manner to work with poor or no credit.
Example of online lenders is Kickstarter, IndieGoGo, and many others. You can search online for others and join.
How to Obtain Loans for Business?
Although applying for a business loan and getting it approved has been made difficult due to the presence of this recession. Therefore, the more you are prepared, the better your chance of getting your business loan request approved.
However, here are steps on how to obtain a business loan:
1. Decide Why You Need the Loan
The first thing you need do on how to obtain a loan for business is to decide and reach a consensus within yourself on what project is the loan meant for on your business. Ask yourself this question, ‘what do I need this loan for?’ This is because lenders are going to ask you such question, and it is your answer that will determine whether you are qualified or not.
Ensure that your answers fall into any of these categories: To kick-start a business, or manage day-to-day expenses, or grow your business. Having decided on what the loan is meant for, you can proceed to the next step involved on how to obtain a loan for business.
Carefully examined your business financial record, most especially your cash flow history and evaluate the amount you can reasonably and adequately afford to apply toward the loan repayments.
2. Find a Lender of your Choice
You will have to look out for a comfortable place to request for your business loan. It is very important to put into consideration the terms and conditions each lender requires if they are available and can be easily met.
Some lenders require you to refund weekly or monthly, this is one of the factors and conditions you need to think twice about if they go down well with you.
3. Apply for the Loan
After you’ve found a lender suitable for your business loan, and you’ve compared and contrast your options, it’s time you apply for the business loans so far it suits your financing needs.
Though it depends on the lender, you are expected to file and submit the combination of the following papers or documents with your letter of application:
• Your business plus personal tax returns.
• Your business or personal bank statements
• The Business financial statements (if it is an existing business).
4. Wait for the Reply
After successfully submitting your loan application form, you are expected to wait for two to four weeks before you will hear from your lender. If you don’t hear from them, you can visit their office to find out why you have not heard from them.
It may be that they need additional documents or are still considering your application to see if you can repay back their money and the interest at the time agreed.
On the contrary, you turn down, don’t give up. Pursue the reason why you were not granted the loan. Was it a missing document you did not submit or a bad financial report? Ask them why you were refused of the loan and alter the request and resubmit it to them or take it elsewhere.