Lenders are Picky and Particular
Bank loans also come with their own set of pros and cons.
• Bank loans are convenient
• Banks are keen on obtaining the interest and partial loan payments back every month
• Banking institutions do offer differ loan options for small business lending
• Banks do offer lower interest rates versus getting a small business loan from a credit card or revolving line of credit
• Bank loans offer tax breaks
• The application process is extensive and it takes a lot of time
• What banks, state they require for a small business loan is often times seems unnecessary
• Banks are more apt to give a loan to a business that is up and running and showing a profit. New businesses present an obvious risk to the lenders
• Banks require some sort of collateral in which the business owner may be afraid of losing if the business fails
• Banks require the business owner to meet a lot of rules and regulations before getting the loan
• Business owners can apply for a bank loan and banks, many times will grant partial loans, but not what was requested, thus the new entrepreneur must find a lender to make up the difference
Another resource a small business owner can go to, is the Small Business Association and the first step is to understand what this association offers. They have several programs, but the qualifications are different and specific. The Small Business Loan Programs have specific purposes and you need to find out how you must qualify, as each type of loan has individual eligibility specifications for the loan application. Based upon your business needs determine which Small Business Lenders may help you.
If you need a small business loan for start up funds you can apply for a small business grant, and you do not have to pay grant money back. Although, there may be some promises you have to do for a few years. Research all Government Grants and how they work as there are limitless grants for just every purpose and to every individual who is willing to take the time to research options and fill out application forms. Help for the small business owner have resources through the local government, state government and Federal Government.
Other resources for funding your small business can be obtained though places such as those advertised on the television, for example, Venture Capital. Those who find it too difficult to obtain funding through traditional sources, like a bank may be able to obtain an equity type of financing through Venture Capital.