Securing a Small Business Loan

You're a small-business owner and find yourself in need of more office space, new machinery or any of a number of other items that would help take your operation to the next level. Unfortunately, you don’t have the cash on hand. You need a small business loan. Well, take heart; you're by no means alone. At some point in time most small businesses need a little extra capital with which to grow.

But, how much money is enough to do the trick? The first thing that you must figure out is exactly what your needs are. This will involve sitting down and doing research into the cost of the supplies, items and services you'll require in order to upgrade things smoothly. Don’t neglect to factor in such items as sales taxes, setup fees or any other associated costs. Once you've come up with what you think is a final number, it's wise to tack on a little extra for good measure. You never know what other expenses will pop up unexpectedly (and they will), and you want to make sure that you have the money to handle them when they do.

Now it's time to do some loan shopping. There are two types of small business loans that you can apply for – secured and unsecured loans. A secured loan is funding in which you've put up collateral in return for the lending institution providing you the needed money for your business purchases or operations. Unsecured loans do not require collateral, but are a significantly more difficult to obtain. You and/or your company will typically need a strong business history as well as a much higher credit rating to be approved for this type of loan.

If you're looking for a secured loan, you generally have a number of options. Start by talking to the bank that you regularly do business with. They'll likely have a brochure or information sheet that will tell you what programs are available, what their borrowing limits are and what you'll have to supply with your application. Once you have this information, shop around with other banks or search the Internet for secured business loans being offered by other institutions.

If you're in the market for an unsecured loan, it's likely you'll have a somewhat difficult time finding one. Be sure to ask your home bank just in case, but you'll probably be doing considerable research for this type of loan. Thanks to technology, however, that research is often as simple as typing 'unsecured business loan' into a computer search engine and sorting through the results. There are many great resources that can help you better understand business loan terms.

Remember to look at everything logically and unemotionally. Because you've put so much of your time, effort and talents into it, getting the money to keep your business running or take it to the next level can be a stressful endeavor. Nevertheless, take your time and do your homework. Compare interest rates, loan terms and any other loan variables to see which ones will best suit your business and financial situations. And, be sure to read each and every detail before you sign any documents. After all, this is your business we're talking about.

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