10 Key Steps to Getting a Small Business Loan

Business finance is one of the more complicated aspect of any established company. It’s not something everyone understands because it’s far more complicated than it appears to be. Unfortunately, businesses often require a cash injection to carry them over until the bumps in the road are smoothed out. Loans are part and parcel of the industry and they’re so important on many levels. However, obtaining a business loan is quite a challenge. So, what steps can you take to obtain a loan? Check here!

10 Steps to Obtaining Small Business Loans

  1. Have a Business Plan at the Ready
  2. Understand How the Lending Process Works
  3. Learn the Various Types of Business Loans Available to You
  4. Understand What Does and Doesn’t Constitute as a Guarantor or Security on the Loan
  5. Review Your Credit and Improve it – If Possible
  6. Always Research the Local Lenders Most Relevant to Your Business
  7. Have the Latest Business Finance Statements Ready
  8. Be Specific Over What You Need to Borrow
  9. Specify What the Money Is to be Used For
  10. Ensure You Review All Information Before Submitted it on Your Application

Business finance needs to be spot-on for a business to succeed. And the harsh reality is that if your loan application is full of errors or mistakes, the lender won’t be impressed. Some might reject your application entirely. If you’re lucky, a lender might take pity on you, but it’s not always likely. Remember, it’s about fully understanding how this process works and what a lender needs to see with your loan application.

Loans Are Complicated

The above steps are incredibly useful in getting small business loans, however, it’s fraught with risks and headaches. You must fully understand what it means to take out a business loan and what lenders expect from you too. For instance, a minority of business owners have taken out a loan in hopes of rescuing their business. Unfortunately, it hasn’t been enough to save the business. Some borrowers believe since it was a business loan and the business is no longer operational, that means the loan is wiped out. It’s a nice idea but entirely false.

Lenders expect to be paid back. Regardless of what happens to the business, it’s more than likely you’ll have to repay the loan back. That’s the complicated side of business finance. If you take out a loan, unless you’re declared bankrupt and that’s included in that bankruptcy, you must pay it back. That’s why you must be prepared for any eventuality, even if the loan comes from friends or a family member.

No Guarantees Lenders Will Approve Your Application

Not to cast a shadow on your hopes, however, some lenders may say you’re too much of a risk to be eligible for their loans. If this happens, you must reassess your finance options. There are lots of avenues to explore, including direct loans, equipment loans, and even peer-to-peer lending. In some instances, crowdfunding might assist you to a point. However, loan applications are likely to be rejected if you don’t have your application in order. Small business loans only work for businesses with the ability to repay the loan, that’s worth chewing over too.

Choose Your Loans Wisely

A small business loan is an important tool for many as it’s a way to expand or inject some much-needed cash into the business. For some, the money helps to upgrade vital equipment and they’re able to repay the money back without a problem. In the process, they’ve also notched up a few positive points for their credit. Of course, the reverse can happen if you default. Business finance is complicated, however, there are many avenues to explore, so find the right financial solution. For more details, visit: https://www.lowfiveproductions.com/microcredit-business-loans-explained/


What is microcredit

Microcredit is also called microfinance. It is a type of loan or credit opportunity offered to low income earners or unemployed individuals to start a venture. Such individuals would ordinarily have no access to other financial services because they cannot meet up with their terms and conditions. Microfinance was set up to provide financial aid for such individuals.

Most microfinance institutions can provide individuals with loans ranging from $100 to $30,000. Depending on how much the person requests for. Microfinance institutions thrives in mostly Third World countries such as uganda, Nigeria, Siberia, and so on.

According to World Bank, over 500 million people have benefitted from microcredit loans all over the world.

How does it work?

Every microfinance institution have their own terms and conditions as regarding eligibility. One thing that is common between most of them is that they have interest rates. Their interests rates are usually lower than the conventional money lenders and that is why they’re convenient.

Like conventional money lenders, microfinance banks also have repayment plans. Microfinance banks hardly ever asks for collateral. They usually gather borrowers together to support each other through their contributions. If the program is successful, everyone goes home a winner. If it’s not, some will run at a loss while a selected few will gain.

Mind you, there are microfinance institutions that do not ask for interest at all. Those kind of institutions usually work closely with World Bank. To be eligible for such loans, one has to follow all their instructions to the last. Learn more!

What is microcredit strategy

The strategy of microfinance institution is to reduce poverty to the barest minimum. Microfinance institutions also aim to provide access to money for economically average citizens. As microfinance institutions begin to gain grounds their goals begins to supersedes just alleviating poverty. Some their goals are listed below.

  • Provision of skills and entrepreneurial training for poor citizens. Capital is just one part of starting up a business. Providing them with a skill set is indeed a step in the right direction as they would have something to invest in. This strategy can be likened to the Chinese proverb of teaching them how to fish with the right tools.
  • One particular characteristic of traditional money lenders is that they have high interest rates. Banks have lower interest rates but depending on a whole lot of terms and conditions. Well, start-ups wouldn’t need to worry about that with microcredit. Microcredit provides start-ups with extremely low interest rates that favors everyone involved. That way they don’t get discouraged of borrowing money in the first place.
  • Microcredit business loans is a ray of hope for new start-ups. It encourages them financially to start their venture.


As you can see from the above, microcredit is a better way for new entrepreneurs to acquire loan. With their extremely low interest rates and other incentives, I’d advise small business owners to apply for loans from them than from loan sharks in the financial market. For more details, visit: https://www.lowfiveproductions.com/small-business-guide-to-alternative-lending/

Small Business Guide to Alternative Lending        

Accessible subsidizing for businesses is changing, and the present status of the economy can make chasing and getting small business loans to appear to be a bad dream. In case you’re attempting to get a bank loan or don’t care for your present choices, there are options in contrast to conventional loans that are likely accessible to you.

A significant number of these elective sources exist on the web. You may consider seeking after this subsidizing course if you’ve been turned down for loans previously, have helpless credit, or are uncertain of how much financing you truly require for your business.

Read on for the best 6 elective financing alternatives.

1. Traditional loans

While you might be comfortable with and hoping to avoid conventional bank loans, there are still more alluring alternatives to increase capital from banks. For instance, SBA and private company loaning assets go about as options in contrast to normal bank loans.

These business loans and assets are put aside explicitly for private companies and business people.

2. Grants

An award is a monetary help granted by the bureaucratic, state, or nearby government. It is a particular measure of cash given to a candidate who shows a promising possibility of achievement.

Since awards are cash being granted as opposed to just acquired, they are significantly more serious about getting. While they are hard to get and as a rule requires specific conditions, awards are fantastically significant. In case you’re seeking after an award, government and small business loans alternatives are likely the most popular, however troublesome courses to go.

3. Fintech 

Ongoing development of budgetary innovation business finance specialists could fill in as a useful elective subsidizing course. These moneylenders commonly give littler loans, credit alternatives, lower obstructions to the passage, and capacity exclusively on the web.

4. Crowdfunding 

Crowdfunding is another elective wellspring of financing that is normally gainful for item dispatches. This road of business finance resembles propelling a promotion presentation page to measure premium; it’s a reasonable method to test the market.

Crowdfunding has a few advantages; however, if you’re keen on going this course, it’s essential to note that each crowdfunding site varies.

5. Peer-to-Peer lending 

Shared loaning is likewise alluded to as social loaning, which permits distinct individuals to acquire and loan cash to and from each other. Consider it a mix of crowdfunding, loans, and holy messenger speculation.

A few online stages go about as pitching administrations to the interface you with business finance specialists for assets and knowledge or arrive at a network of similarly invested people keen on contributing.

6. Venture Capital and Angel Investment

Funding or holy messenger speculations are people or firms that are happy to siphon assets into new companies. They are normally searching for an arrival (you would require a leave plan or growth plan) or a portion of your business.

This sort of subsidizing is entirely pertinent for explicit ventures (tech, clinical, on the web) and, for the most part, requires your business to be, to some degree, troublesome and prepared for growth. If this course appears to be a decent choice for you, at that point, a strong business plan and pitch deck are fundamental here.

No matter the funding be prepared with your business plan

Looking for financing for your business in the more usual style of bank loans can be tested. These elective subsidizing alternatives can assist you with sparing time and dismissal en route. Regardless of the small business loans alternatives you pick, it’s critical to have a strong business intend to back up your business and better your odds of securing reserves. Click here!