If you want your business to expand, you need some cash and since money does not simply fall of the trees for small businesses, you need business loans to support and expand your business. Small businesses need funding and it is important that small business owners make sure they get business loan deals from better sources than the loan sharks do. Money might be available, however it is not easy to get as the banks have tightened their lending policies and it has become hard for the entrepreneurs to get all the financial help they need for their small business. This has caused the small business owners to get creative with finding the source of capital for their business.
- Bank- The best place always to get a small business loan is the Bank. They offer low interest rate and they are always the trustworthy lenders. However, today small business owners must search extensively for a bank that is ready to lend. Many entrepreneurs only limit the search to 3 or 4 banks and stop if they do not succeed. For achieving success, a more persistent search is needed. Small business owners must never give up, to extend their search for banks who will lend you have to target a minimum of 10 banks, for contact details look them up in the phone book. Do everything right and approach the right person at the bank and prove that you are a profitable business. Your chances of grabbing loan will increase if you show the bank your past profitability and describe your future profit plans. If you do not have any past profits, you must at least tell them your profit plans for the future or you will not get a loan.
2. Internet- Another source for obtaining business loans is through the internet. There are many websites where entrepreneurs can seek loans from alternative lenders such as small companies or even individuals. These sites might provide loans ranging from ten thousand dollars to even 1 million. The interest rates range from 7%-15%, it is generally more than bank interest, however lesser when compared to credit card loans. If you wish to list your company on the money lending sites then you must describe your business clearly and concisely. You must make sure that you do not provide any confidential information and instead use pictures and videos. They itself speak a lot.
Friends and family- If you have not succeeded in obtaining a loan from the bank or online, you can always rely on your family and friends. Nobody wants you to succeed in business more than him or her. So ask them if they can lend you money for your small business. You can pay them a decent interest rate as a token of gratitude for lending you the loan. However, make sure you do it correctly. Write a contract for the loan with right payment terms so that you do not run afoul for the IRS. Just keep in mind that you cannot mix business and personal relationships.
After you get your loan, make sure you use it in the right way to expand your business and try to repay the loan as soon as possible to save up on the interest rates.