How To Get A Small Business Loan
Get a start-up loan to generate capital
Small businesses are vital to the health of every economy, and as such, you will find a wide range of resources that can help you find a start-up loan. Knowing how to get a small business loan means looking further than just your bank, though traditional lenders are also an important source of funding. However, there are also government programs available to new businesses that need financial support to get up and running.
Also, in addition to small business loans, you need to look into grants. While the United States federal government does not offer any grants to new or expanding businesses, they may be available at the state level, so check with your state's government for details.
How to Get an SBA Loan
The U.S. federal government will, however, provide you with resources for finding a start-up loan through its SBA program. Through the Small Business Administration (SBA), you can qualify for low-interest unsecured small business loans from registered lenders that provide you with the capital you need to launch your venture without crippling you with interest charges.
If you're wondering how to get a business loan through the SBA, you need to ensure your business venture meets the size requirements. Then, you need to fill out the SBA loan application paperwork, which includes application forms, personal background statements, personal and business financial statements, your resume, business lease agreements and other information that helps the lender assess your qualifications. You will also need to provide tax returns, lease information and qualifications of the other principals at the ownership levels (if any).
Other Sources of Small Business Funding
Your bank may also offer you a small business loan or start-up line of credit, and there's another seldom-used strategy you may want to consider if you really need some extra funding and can tolerate the risk. If you have more than $40,000 in a 401k fund, you can use it to finance your start-up without paying taxes or being subjected to interest or penalties on the money. However, you must use the money you access to start a new business or purchase or invest in an existing business; if you would like to use this strategy, it is recommended that you work with a financial advisor who can help guide you through the process.