If you’re looking to acquire a small business loan, then you’re probably wondering what the top elements are, which come into play so that you can get such a loan. Well, there are several you need to know of, and we’ll take a minute to talk about each of them here. So with that said, here are the things you should keep an eye on when considering a small business loan.
Your personal credit affects your chances at a business loan
Contrary to what some might think or say, your personal credit will have a significant impact on your capability of getting that small business loan. If you’re looking up how to get a small business loan, one of the top things that you will see as advice being given, is the fact that you need good personal credit. The philosophy behind this is that your ability to manage funds in your personal finances reflect how well you will be able to handle the loan you are given.
Your company’s history is very important
It’s not only important to have a clean financial history as a company, but also to have a proper such history. For that, your business needs to have at least 6 months, in some cases a year of activity before you can think about getting a small business loan. This can be quite inconvenient but it’s one of those things that lenders ask for in order to get some sort of guarantee for their investment.
There is more than one lender available
The fact that you need a small business loan might be obvious, but the source of this loan probably isn’t. If your first instinct is to go to your local bank, you are missing out on some awesome opportunities. It might just be the case that in your particular situation, the local bank offers the best deal. However, you won’t know that for sure until you check out all the other lenders in your area or available to you. This includes online lenders as well, with a wide selection of professional lenders as well as peer to peer lenders.
Smaller loans can build you up for an approved greater loan
If you’re eyeing a loan that you don’t think you can get right away, you should try getting way smaller loans first, before it even comes to the point where your business needs that big one. By doing this you are improving your credit score and the fact that they’re so small, means that you will have no problem paying them back on time or even early.
Make sure to make a mental note of these tips when you’re attempting to secure a small business loan, as they bring immense value to your overall endeavors.