At some point, most small business owners require financing for their business. The majority of small business financing comes from personal resources, friends and family, and small business loans.
Most small business loans are obtained through working with a lender (local bank, non-bank lender, or national lender). Therefore, to obtain a loan, you must find a lender that is interested in working with you on your project. A business plan (new or existing businesses) or loan proposal (existing businesses) should be used to communicate the nature of your project and business with a potential lender. Completing actual loan application forms is something that comes later in the process. Initially, you should focus on developing a quality business plan or loan proposal. For information on developing a business plan or loan proposal, click on the following links:
Lenders consider a variety of factors when making a decision on a small business loan. Therefore, it is important not to automatically assume that you will be able to obtain a business loan. Understanding loan requirements from a lender's perspective before talking with your loan officer can help you identify any areas where you may face challenges in obtaining a loan. Identifying potential problem areas can help you be better prepared. The ASBTDC recommends that you review "Can I Qualify for a Loan". This informational article is available at the following link:
Many business owners choose to utilize the Small Business Administration's small business loan programs. SBA small business loans are not direct loans. Loans are provided through financial institutions (i.e. bank or non-bank lender). Therefore, to obtain an SBA loan, you must first locate a lender that is interested in working with you on your project. To determine if a lender is interested, you should submit a business plan (start up or existing businesses) or a loan proposal (existing businesses). Information and assistance in developing a business plan or loan proposal can be found at the following links:
Additional information regarding the various SBA loan programs can be found on the SBA web site.
There are many myths surrounding grants for small businesses. The reality is that grants for small businesses are relatively rare since most grants are for non-profit organizations or educational institutions. An informational article on grants can be found at the following link:
The ASBTDC can assist existing and potential small business owners as they work through the financing process. The ASBTDC offers a variety of resources including training programs, informational articles, and recommended action steps. In addition, ASBTDC staff can answer questions, provide guidance and direction, review business plans/loan proposals, and aid in the preparation of loan application packages. It is important to note that the ASBTDC does not give business loans, and the ASBTDC does not have any input in the lending decision.