Tweet

Small Business Loans Grants

Written by: Richard Matheson

Article Overview: I’m often asked what the magic trick is to obtaining small business loans grants. I hate to be the bearer of bad news, but I’m afraid to reveal that there is no magic to it at all. Being successful in a loan or a grant application requires an in-depth process of planning and the fulfillment of a number of requirements. What is that process? What are those requirements? This article is here to help summarize the steps you need to take to have your loan request approved.

Small Business Loans Grants

I’m often asked what the magic trick is to obtaining small business loans grants. I hate to be the bearer of bad news, but I’m afraid to reveal that there is no magic to it at all. Being successful in a loan or a grant application requires an in-depth process of planning and the fulfillment of a number of requirements. What is that process? What are those requirements? This article is here to help summarize the steps you need to take to have your loan request approved.

First of all, the number one requirement is having a good credit rating. Scratch that – you need to have a better than good credit rating. You need to have an excellent credit score in order to qualify for a business loan. If you’re wondering why that is then I don’t think you’re meant to be in business in the first place. Loans are only given out to those people who represent a low risk of failure to repay. Check out your credit score and see where you stand. If you’re at the low end of scale, you might to want to see what you can do to improve your credit rating before starting a business.

Second of all, any lending institution will look to your equity. Unless you’re able to put down a down payment of sorts in the neighbourhood of 10 to 20 percent, you’re not likely to have your loan request approved. Lenders want to know that they’re not the only ones with a financial stake in the venture. They want you to have a financial commitment to the project as well.

When applying for small business loans grants, the third thing lenders will look for is your experience. If you’ve never had management experience or some kind of relevant business experience, it’s doubtful that any lending institution will want to give you any of their money. After all, how can they be sure that you’re not going to mismanage yourself right into bankruptcy? They need as much assurance as they can get, and your experience helps provide that. As a rule, at least three years of relevant management experience is what you should have under your belt before applying for a loan.

Fourthly, there is the all important business plan. Explain your business in its entirety, from concept to long range plan. How do you plan on making a profit? How do you plan on reinvesting those profits? How do you plan on making back the money of the lenders? And don’t get too caught up in the vague generalities. Be as specific as you can, and include everything from income statements go cash flow to balance sheets in your plan.

Finally, most lending institutions will require some form of collateral before approving your application fro small business loans grants. In case your business plan isn’t carried out as expected and the profits don’t roll in like you expected, lenders want to know that they will have some sort of guarantee. Whether its property, inventory, stocks and bonds or the like, lenders want an asset that can be used to repay their debt should it be necessary.

Related Articles
  Small Business Loans with Bad Credit
  Finding Information on Small Business Loans
  Small Business Grants and Loans
  10 Ways To Fund Your Business
  Small Business Grants -- Fact or Fiction

Article Tags: bearer of bad news, business experience, business loan, credit rating, excellent credit score, financial commitment, financial stake, fulfillment, grant application, lenders, lending institution, loan request, magic trick, neighbourhood, place loans, relevant business, relevant management experience, risk of failure, small business loans, small business loans grants



Related Forum Posts
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
These maybe the coldest franchises out there: - Here are the worst 15 performing franchises in regards to having the highest Small Business Administration (SBA) loan failure rates. The list is dotted with sub sandwich shops, fitness centers and car shops. WORST FRANCHISE LOAN FAILURES Failure % 1 OBEE'S SOUP SALAD SUBS 55.56% 2 LADY OF AMERICA 41.94% 3 COUNTRY CLUTTER (BED & BREAKFAST) 41.18% 4 COPY CLUB 36.36% 5 ALL TUNE AND LUBE 35.71% 6 PICKERMAN'S 35.71% 7 PHILLY CONNECTION 35.59% 8 ROLY POLY ROLLED SANDWICHES 34.78% 9 COTTMAN TRANSMISSION 34.48% 10 HAIR COLOR EXPRESS 33.33% 11 LEE MYLES AUTOMOTIVE TRANSMISSIONS 33.33% 12 GODFATHER'S PIZZA 33.33% 13 SMOOTHIE FACTORY 33.33% 14 BLIMPIE 31.39% 15 GOLF U.S.A. (RETAIL GOLF EQUIP.) 30.77% Source: Small Business Administration, SBA Loan Performance Within Franchise Code for the Period of FY 2001 - 2005
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Re: Biz Plan Competition - i just wanted to say that posting Small Business Events on CanadaOne is a great resource. Thanks Julie!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Implementing Internet Business Ideas

Stress: What Causes It and How To Deal With It

Intro to Search Engine Optimization

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.