Small Business Loans

Put yourself on the other side of the desk for a moment. If someone asked you for a small business loan, you'd want to know exactly why he or she wanted the money and what the chances were that he or she would repay the loan in full and on time.

So the key to getting a small business loan is preparation. First, gather together the documents that will help persuade the lender that a small business loan is necessary and that you are a good risk. You will need:

A business plan - The business plan show the lender not only why you want a small business loan but what you plan to do with the money.

Cash flow projections - What's the first question any lender has? Will you be able to repay the loan. Your business's cash flow projections give lenders concrete financial data that they can use to assess this risk.

A statement of your personal financial status - A list of your personal assets and debts to give the lender a fuller financial picture.

To get a small business loan, you may also need these documents:

Past business tax returns - If your business is established and you have past business tax returns, it's a good idea to take them with you. They'll give the lender a better idea of how your business is doing financially.

A credit rating report - Basically, you establish a credit rating by buying things on credit and paying back the money you owe. Your loan repayment history plays a big part in establishing your credit rating, but all your "credit" dealings make up the history that's used to determine your credit rating.