Small Business Loan

Few if any small businesses get by without financing help. Whether it's from a friend, a bank or another businessperson, small business owners will need small business loans.

First, let's clarify what a small business loan is. The phrase "small business loan" is a bit of a misnomer. These small business loans, for the most part, are more like personal loans, based on personal finances, for business purposes.

Where To Find A Loan

Big-name banks are great lenders for businesses with huge growth plans and potential.

For the more main stream crowd, community banks tend to be the key. These smaller banks often provide competitive, if not simply better, rates. They also give a start-up business a chance to establish a strong working relationship with a bank that will appreciate its business.

The United States Small Business Association also offers loans and financial advice for business. Visit its Web site at http://www.sba.gov.

Sell Yourself

If you need a loan, you must convince another to provide that loan. Preparation is essential to successfully convincing a lender of a business's credibility.

To be successfully portrayed as credit-worthy, the lender's view must be kept in mind. The lender will want to know what the money will be used for, whether or not the business is a good risk, and how the loan will be repaid. The lender will also want to know what collateral - tangible assets - the borrower has, the borrower's willingness to risk his or her own money and the borrower's expertise of the respective industry.

Create A Business Plan

Much of this information can be conveyed effectively in a clear, concise business plan. A well-written business plan will give the potential lender a sense of what to expect as a result of the loan. The plan should open with an executive summary, which is essentially an abstract of the rest of the business plan.

The plan should include an overview of the company and the industry; descriptions of products and services offered; marketing and sales strategies; company organizational charts and policies; and, of course, company financial information.

It is a lot of work to put together a good business plan, but it is essential to getting a business loan. And it is helpful in running your business.