For a small business to get on the ground, or to keep one running, it must have financing that is often in the form of a business loan. To help small businesses recover since the outbreak of COVID-19, special programs in the form of both grants and loans are available.
One form of small business financing is debt financing. For small business banks or other financial institutions, commercial loans can be applied like credit unions. COVID-19 For grants and loans to aid recovery, small businesses apply through the Bank for Small Business Administration.
These are the major steps that you should follow through Apply for a Small Business Loan
Know the Reason for and Amount of the Business Loan
Business owners, whether they are firm start-ups or existing firms, need to take some time and be able to articulate why they need a business loan and how much they need. This is also true if you need COVID-19 funds. Often, businesses may not be able to address the question of how much they need until preparing their financial statements as part of their business plan.
Review your credit history and credit score
If your business is a start-up or less than three years old, your personal credit history will be evaluated along with your business credit history. Before you apply for a small business loan, take some time to obtain your personal credit history. Request your credit report from each of the major credit reporting agencies.
Review these credit reports. If you notice an error in your credit report, write a letter to the agency and give a description of the error and ask to correct it. If there is an error that the agency will not fix, file a credit dispute report. Check your credit score. A credit score of around 700 is very good and increases your chances of getting approved for your loan.
Start Reviewing Your Borrowing Options
It appears clear that a small business operator would understand the rationale for and volume of the company loan that they want . If the company is a startup, this isn’t always correct. Owners of start-ups might just be in the procedure for specifying the amount of funds they want and why.
See commercial banks available to you. Don’t just go to the big, national commercial banks. You may have better chances of loan in small regional commercial banks. Other non-bank institutions may be an option for you, such as credit unions.
If you are a member of a local credit union, talk to your loan officer about your need for a small business loan. If they take such loan, then apply for the loan there too.There are other options, such as microfinance loans that loan to startups.
If one lender turns you down, another may say yes to the same loan application, so keep trying. If you wish to apply for COVID-19 funds, you can apply to the Small Business Association through your bank for the programs listed below.
Visit Your Local SCORE and SBDC Offices
Particularly if your company is a startup, you might choose to find some guidance and help from seasoned executives. In case you’ve got a chapter of SCORE in your region, they’re a fantastic and completely free supply of ideas and help. If you do not have a local chapter, then you can get online advice and online counseling.
The SBDC is a part of this Small Business Administration (SBA) and is present to assist new and existing tiny businesses. It helps small business owners together with the application procedure for a small business loan.
If you would like to submit an application for COVID-19 capital, they will be able to assist you with the application forms to the applications listed below.
Prepare Your Business Plan
This may be your most important step. To get a small business loan just about any lender, you need to prepare a good business plan. In fact, as long as you have a good business plan, chances are you won’t even know how much money you need or how fast you can repay it. The business plan is in addition to the loan application required by the financial institution.
Business plans have several parts. A good business plan will have many years of past and project financial statements for your business. This will include a description of the collateral or the type and value of the property that you will use to secure the loan.
You will need to include market analysis. Your business will also serve as a statement of your own experience.
If you are applying for COVID-19 funds, you have to be specific about how you are going to use the funds according to the program conditions (see below) for which you are applying.
Plan a Presentation and Make the Appointment
For the loan officer at your financial institution to make your application for a small business loan, you have to make it attractive. Prepare a presentation of your business plan and application to your loan officer.
Have a professional package to take your financial officer in hand with a narrative, as well as any financial statements, spreadsheets, charts, and graphs required. Be sure and include an executive summary.
Many loan officers first read the executive summary and decide if they are based on it. Make an appointment with your loan officer and request sufficient time to do a short presentation with visual aids, based on your business plan. Be concise, concise and organized.
Paycheck Protection Program – for COVID-19 applicants
If your business has 500 employees or fewer, a paycheck protection program is a forgivable loan that will pay for eight-weeks of a business’s payroll costs, so that your business can retain workers or lay back workers at work.
Could keep This loan will also cover rent and utilities. If the loan is disbursed in full, the loan is forgiven and wages are paid up to eight weeks after the loan is disbursed. The forgiven debt cannot be used for more than 25% of rent and utilities. A partial apology is also available if you do not wish to fulfill these conditions.
Your best bet is to work with a bank that you have worked within the past. There are online lenders who are participating in the program.
Do not delay in applying for this program.
Economic Injury Disaster Loans – for COVID-19 applicants
It’s been enlarged for the COVID-19 tragedy, but use quickly. It gives low-interest loans to small companies stricken by disaster. You don’t need to go through a financial institution. It is possible to apply right on the Small Business Administration’s web site.
The requirement for the application is hefty and the loan numbers it provides are changing almost daily. A lot of the loan is really a grant, therefore it’s well worth applying for. Have a look at the site for up-to-date info.
Disaster Unemployment Assistance Program – for COVID-19 applicants
Freelancers and gig employees are newly eligible for assistance under this program. The website gives you a tool that allows you to check and see if you deserve relief.
Subscribe to our newsletter! Join us on social networks!