Finding funding to start a business or bolster an existing one has been more difficult than usual lately. While the economy improves, banks are still reticent about lending to small-business owners, and Better Business Bureau recommends developing a solid business plan to earn the bank's trust and increase your chances of landing a loan.
To increase the chances of getting a loan, BBB recommends that small-business owners and entrepreneurs:
- Talk to the U.S. Small Business Administration or its free counseling partners. Talking to a counselor or lender relations specialist can help increase your chances of getting a small-business loan.
- Review your credit report. Lenders will take into consideration your personal credit history and if your report has any errors it could affect your chances of getting the loan. You can check your credit report once a year for free with the three major reporting bureaus -- Transunion, Experian and Equifax -- at www.annualcreditreport.com. If you find errors, contact the reporting bureau.
- Create a comprehensive and professional-looking business plan. Lenders want to know that you have done your research, considered your risks and the current climate for opportunity and planned for the future. Thoughtfully and thoroughly explain how much money you need and how you'll use it. Put care into the final product, not only in the content, but also how it looks.
- Show that you're personally invested. If you have money invested in your own business, it will show the lender that you are personally dedicated to its success.
- Plan to pay it back. Banks are in the business of making money. To that end, they want to know that you have a solid plan for paying back the loan and can also provide enough collateral to cover the loan if the business fails.
REACH KELVIN COLLINS, THE PRESIDENT/CEO OF THE BETTER BUSINESS BUREAU OF CENTRAL GEORGIA AND THE CSRA INC., AT (800) 763-4222 OR WWW.BBB.ORG.