Just as lending has tightened on small businesses, everyday consumers are finding it difficult to get loans as well. The basics — having good credit, proving you have the income to repay the loan and having money for a down payment — apply to anyone asking a bank for money. Once you’re sure you really need a loan and have a plan for repaying it, here are a few tips to get you started:
To improve your chances of getting a small business loan, ask yourself these questions:
– Do you have a strong business plan that shows specifically what you’ll do with the loan?
– Can you show how you will repay the loan? Projecting where or how you’ll make money in the future, and how that will go toward repaying the loan, is important.
– What other assets do you have? A lender will want to know if you default, there is something else they can fall back on. Also, you’ll want to prove you have a history of getting and repaying credit and that your personal and professional finances are in order.
Question: Because loans are so much more difficult to obtain, would you be more open to lending money to a relative or close friend? Have you borrowed money this way rather than through a bank?