Sounds simple, and it is. First, find out who is going to put money into your business. If you need a loan for your small business, you will most likely get it from a bank. A bank will look at you and your business to see if it is a good place to put their money. They look at how risky you are and then decide whether or not to give you the loan you asked for.
It is very important to understand what the bank wants. Every place that lends money has its own way of figuring out the terms and conditions of a loan agreement. Most of the time, you will need to have a good credit score and have been in business for at least two years. You can make the bank's investment in you less risky. The longer you've owned your small business, the higher your credit score and the more good information is on your credit report.
When you apply for a loan, some banks will accept a lower credit score from you than others. The banks can buy your credit report from one of three different Credit Agencies. Each credit agency has its own way of figuring out your credit score, so you have three different business credit scores.
If you own property, most credit agencies will be more likely to give you a loan for your small business. But you should know that if you don't pay back your loan, your property could be at risk.
Make a business plan before you talk to the bank about a loan. The plan should explain in detail how you plan to use the loan and what benefits it will have for your small business.
