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How to Get a Business Loan

Are There Business Loans Just For Minorities?

Are There Business Loans Just For Minorities?

Although the mechanics and characteristics associated with business loans do not waver based on gender, there are some differences that exist for the two sexes through the presence of various government programs. For instance, there are some funding sources that specifically target women entrepreneurs and their presence in business. These various programs are essential resources for business women looking to expand build their companies.
Business loans for women, are the same as for men. However, it is important to understand these various programs and the benefits they offer entrepreneurial women. 
The Small Business Administration is a program that enables small business owners resources to find the most suitable and efficient loans for their business. Within this administration exists an Office of Woman’s Business Ownership.
The Office of Woman’s Business Ownership offers teaching, counseling, inspiration, and encouragement for all women looking to start their own business. In addition, the office allows a woman to research various markets and understand the intricacies associated with various business loans. Furthermore, the office works closely with many lending intuitions throughout the country to pinpoint the best loans. The term “best loan” simply refers to the most suitable loan given that individual’s particular situation or the loan with lowest possible interest rate attached. 
Outside of this resource, there are numerous projects, programs, and non-profits that have been established to aid women who are starting their own companies. These programs believe that women typically have a more difficult time assimilating into the world of business. To even the playing field, these programs focus their resources on offering loans and finding loans for their female associates, clients, and partners.

How to Get a Business Loan?

How to Get a Business Loan?

Nearly every bank or lending institution will offer loans for businesses. The prospect of a loan is thought to help both sides. On the one hand, the borrower of the loan is awarded financing to maintain or expand his or her business. While the individual is growing the company, the bank is slowing recouping, through the presence of periodic payments, the amount of money lent. In addition to this, the bank or lending institution will also receive interest on the loan.
In the long run, the presence of interest payments allows the bank to turn a profit on the loan. As a result of this profit, the majority of banks and lending companies will offer loans for businesses. 
To get a business loan an individual first needs to apply for one. The process of obtaining a loan requires extensive paperwork and background checks. The most important factor for a bank or lending company is the borrower’s financial status and their history associated with loans.
If the borrower represents no threat and is believed to pay the loan back without problem, the lending company will award them a loan without complication. If the individual, however, possesses a poor credit history or credit score, a high interest rate will be attached to the loan, if approved at all.
Once the initial loan application is completed, it must be sent to the lending company’s loan committee. The banker who brokered the loan is not allowed on the committee. In essence, the application for the loan stands on its own in front of an unbiased panel.
To get a business loan the applicant must show a strong personal history. Everything from the borrower’s reputation to their relationship with their lender will be documented on the application. In addition, a cash flow record, along with a detailed evaluation of the prospective borrower’s asset/liability structure, liquidity, and net worth will be reviewed.
Following this procedure the loan in question should be attached with collateral; an alternate asset that the bank can hold in case of a default. Lastly, to get a business loan, the applicant should also possess a proper capital structure that mitigates the lender’s exposure to risk.
The borrower should have a complete understanding of their business model, the economy, relevant industries associated with the company and any other related conditions. To get a business loan the applicant must do everything they can to decrease the presence of default and prove to the bank they are a worthwhile candidate.

How to Get a Small Business Loan?

How to Get a Small Business Loan?

A small business loan is essential for those entrepreneurs looking to build and expand their businesses. Without the aid of a financial lender, a small business would fail to properly maintain its business model. This failure would inhibit the company from growing and disable any opportunities of securing a long-term profit.
 
 
A small business loan is a lump sum amount of money awarded to a company through a lending institution such as a bank. The bank offers the company this money with the promise that the company will pay the loan off through periodic payments. In addition to the fulfillment of the loan, the small business will also pay interest on the loan–a fixed percentage of added payment to the original amount of the loan.
 
 
As a result of tise harmonic  relationship, many banks and lending companies offer loans for small businesses. The problem, however, is most small companies possess poor credit histories or an unclear plan to make money. These two characteristics are crucial; the bank or lending company will award loans for small business if the company profile suggests the fulfillment of the loan obligation. That being said, the process to get a small business loan is as follows:
 
 
The prospective borrower should first write a small business loan proposal. The business loan proposal should contain a cover letter in which the prospective borrower states his or her name, the background and purpose of the business, the amount requested, the length of the repayment schedule, and how the loan will help aid in the particular business venture. 
 
 
As a result of the numerous loan types, the prospective borrower should choose the loan packages that best fit their particular need.
 
 
In the application, the borrower must include all relevant financial information for the business in question. In addition, a history of similar businesses should be included, as well as the targeted customers, the suppliers, and the resumes of all workers associated with the management portion of the business. Tax returns and financial statements must also be included in the application.
 
 
The borrower should provide a statement citing what collateral will be given if the small business loan is not repaid.
 
 
Once all the information is compiled, the lending company or bank will review the application and inform the borrower within a few weeks of their application whether or not it will issue the loan.

Different Types of Government Business Loans

Different Types of Government Business Loans

To encourage entrepreneurship in the United States, the Federal Government has created numerous agencies that facilitate the acquisition of business loans for small businesses and start-up companies. Throughout the nation there is a plethora of government agencies that allocate resources for the sole purpose of extending government business loans to those in need.
Similar to a student loan, a government loan is an investment of sorts. Not only does the government agency make a long term profit off the loan, but they are also investing human capital and the ability for that company to create a product and spark an industry. Without entrepreneurship the country’s economy would cease to sustain itself.
That being said, the structure and legal system of America was established to encourage all forms of entrepreneurship. The presence of government loans is merely one example of this. 
As a result of the numerous government agencies that offer government loans, there is a wide variety of loan types. Each loan is designed specifically for a particular type of business and individual. The various programs and loan types are available to all small business owners in the United States:
7(a) Small Business Loan: The 7(a) government small business loan is the most common government loan awarded to small businesses. All 7(a) loans are provided by lenders who are participants of the SBA program–a government-run program part of the Small Business Act, which expands the availability of lenders for small companies. To be eligible, all applicants must meet SBA size standards, be for-profit, and be able to demonstrate repayment.
Business and Industrial Loans: The purpose of these government business loans is to improve, finance, and develop the economic and environmental climate in rural areas.
Microloan Program: The purpose of this program is to provide very small loans (short loan periods and small amounts of funding) to growing businesses.
Short Term Lending Programs: These government small business loans are available to small businesses that need help with transportation-related contracts.
These are just a few examples of government loans. To access or apply for these loans, contact a corresponding government program to inquire more about the various loans offered. All information associated with these agencies can be found online.

Process of A New Business Loan

Process of A New Business Loan

The difference between new business loans and existing business loans is not found in the tangible aspects of the loan, but instead in the willingness of the lending institution to offer a financial channel. A loan is an instrument that allows an entity to borrow money.
 
 
Those receiving the loan are offered a lump sum of money. In return, they must repay the lending institution in full, typically through monthly or periodic payments. In addition to these payments, the loan is also attached with an interest rate. The interest rate is a fixed percentage attached to the lump sum that must be paid in addition to the principal of the loan. 
 
 
The premise of the loan is that the company or person receiving the loan can exercise a channel of financing while gradually paying off the debt. The borrower of the loan can utilize the funds in whatever fashion they wish. While the borrower enjoys the lump sum, the bank or lending institution is set to make a long term profit through the inclusion of interest. The lending institution, therefore, is relying on the borrower to pay off the debt. That being said, certain characteristics increase the likelihood of a borrower receiving a new business loan and decrease the presence of exorbitant interest rates. 
 
 
When new businesses or individuals apply for a loan they must embark on a stringent qualifying application. This process will reveal to the lender the entity's credit history, their income statement, and their long term prospects. In addition, an entity seeking a new business loan must also offer the lending institution a business model or plan. By offering the lender a  business strategy the institution can gauge the odds of success or the presence of income in the future.
 
 
New business loans, as a result of a bank's unwillingness to lend to high-default risks, will be forced to undergo a stringent qualification process. This is held separate from existing businesses whose financial statements are transparent. Therefore, an existing business can freely seek out capital through a loan because their income and ability to make money in the future is solidified.
 
 
That being said, the American government encourages the entrepreneurial spirit. As a result of this, the government works closely with banks to offer programs that enable lending and extend new business loans to those companies in need of funding.
 

Are There Business Loans Just For Women?

Are There Business Loans Just For Women?

Although the mechanics and characteristics associated with business loans do not waver based on gender, there are some differences that exist for the two sexes through the presence of various government programs.For instance, there are some funding sources that specifically target women entrepreneurs and their presence in business.
 
 
These various programs are essential resources for business women looking to expand build their companies. Business loans for women are the same as for men. However, it is important to understand these various programs and the benefits they offer entrepreneurial women. 
 
 
The Small Business Administration is a program that enables small business owners resources to find the most suitable and efficient loans for their business. Within this administration exists an Office of Woman's Business Ownership.
 
 
The Office of Woman's Business Ownership offers teaching, counseling, inspiration, and encouragement for all women looking to start their own business. In addition, the Office allows a woman to research various markets and understand the intricacies associated with various business loans. Furthermore, the Office works closely with many lending intuitions throughout the country to pinpoint the best loans. The term “best loan” simply refers to the most suitable loan given that individual’s particular situation or the loan with lowest possible interest rate attached. 
 
 
Outside of this resource, there are numerous projects, programs, and non-profits that have been established to aid women who are starting their own companies. These programs believe that women typically have a more difficult time assimilating into the world of business. To even the playing field out, these programs focus their resources on offering loans and finding loans for their female associates, clients, and partners.