Small business loans
are in greater demand across all domains especially in New York, the Mecca of
entrepreneurs. There are varied lenders ranging from traditional banks to
various financial institutions lending out small business loans in the city of
New York. Loans in this competitive state are hard to get especially with a
long line of entrepreneurs securing funds for their business. With more lenders
come more varied financing options to choose from. It is hence important to
keep some basic points in mind when one is planning to obtain a small business
loan for business.
Even if you are a first
time entrepreneur or an established businessman looking to expand your business,
small business loan is something that you will invariably need especially when
you are in the city of New York. New York, the financial capital of the world
houses many entrepreneurs in its wings. This is the place where people flock in
numbers to fulfill their dream of being successful entrepreneurs. The rise in
entrepreneurs has given rise to both online and offline lenders resulting in
various custom-made loan options for the entrepreneurs to choose from. Below
are some basic points to remember when you are out looking for a loan to fund
your business. Understanding the type of loan that is best suitable and the
competitive rates being offered are important for your business in the long
run.
Credit report- Get
a credit report made and keep track of your credit score. Make sure you have a
good credit history. You can improve your credit score by repaying your loans
on time, paying your taxes and not borrowing more than you actually need along
with your source of income. You can also obtain credit reports from various
financial institutions and major credit reporting countries to obtain
credibility on your credit report. Various lenders review your credit while
reviewing your small business loan application.
List of probable
lenders- When you are looking out for lenders in
New York, make a list of probable lenders that you want to work with. Repute
lenders can provide stability to your growing or new business. Trust is a big
factor here, hence reputation does matter. Check out references from your
friends or from the market. Be aware of the various types of lenders that are
in existence. Talk to the businesses that have been funded by your probable
lenders to understand what you can expect from them. Knowing the current market
scenario and the competitive interest rates keeps you a step ahead when you
talk to your probable lenders.
List of documents- Different
financial institutions require different documents for small business loan
applications. Get in touch with your prospective lenders and obtain the
complete list of documents required. Have your list of documents prepared. You
will need a business plan, information on the business, investors, financial
statements, projections about cash flows and balance sheet etc. Keep the information
ready, well documented and a copy of every document you submit.
Propose for the right
amount of funds- Do have a loan proposal ready that not
only talks about the exact amount you are looking to borrow but also is
substantiated by how you want to utilize the funds, the marketing and legal
structure of the business, the revenue model and the expected profits within a
certain period of time. Your small business loan proposal should have a purpose
and meet the various requirements of different financial institutions. Do
remember that lenders will be interested in ROI (Return On Investment) from the
business. That is the first reason why they will put their money in your
business.
Have a meeting- In
a city like New York where deals are made over a meeting, fixing a meeting with
the financial consultant from your list of probable financial institutions from
where you are hoping to get a loan is important. Bring all the documents that
were requested, go through them with the consultant. Make sure all the
documents are in order and that you understand your liabilities as well.
Follow up with the
financial institution- Do wait for some time before
following up on your business loan proposal with your probable lenders. If the
loan gets rejected, ask them the options available or what exactly do they
require or what are they looking for. Transparency should be there between the
borrowers and the lenders from the start. If you don’t like or don’t understand
something, ask them to explain.