UNDERSTANDING SMALL BUSINESS LOANS

The entrepreneurial spirit...different degrees of it exist in all of us. The desire to be our own boss, rather than slaving day-to-day for a cubicle tyrant, seems more appealing with each click of the standard office clock. You're tired of playing nice at company functions, you're annoyed with trite interoffice e-mails, and you've certainly had your fill of making someone other than yourself rich. Sound like you? If so, starting your own business may be the answer to all of your office woes. But, just like anything else in life, if you're going to really give it a go, you have to have a plan. And, you will soon find that the purpose of that plan is not only to head you in the right direction, but it is also designed to help you procure the capital you need. This start-up money will likely come in the form of small business loans.

ELEMENTS OF A SUCCESSFUL LOAN APPLICATION

Step One: be prepared. The more organized you are, the better your chances become for receiving small business loans. Know exactly how much you money you will need, why you need it, and how you will pay it back. You will also need to convince your lender that you are a good credit risk.

Step Two: the written proposal. To maximize your potentiality for being given small business loans, it is best to prepare a written business plan or proposal for your lender. This plan should contain the following:

Business name, name of principle owners, social security for each principle owners and the business address
Purpose of the loan: specify what the loan will be used for and why it is needed
Exact amount required to achieve your purposes
Ownership structure: details on your company's organizational breakdown
Management profile: a short statement on the business, educational, or skills possessed by the principle owners
Clearly define your product and market
Identify your competition and how you will compete
Profile your customers and explain how your business will meet their needs
All required financial information: such as income statements, personal financial statements, and collateral