Bank Financing

If you would like to keep complete ownership of your business but lack the monetary means to start it yourself, bank financing is a good business funding option for you.  For a first time business owner, you will need to have a detailed business plan before you approach the bank.  You business plan will not only help you to gauge how much funds you will need to secure but also let the bank know that you will be capable and likely to pay it back.

To find a bank, many people automatically go to the bank where their personal banking relationship is with.  However, this is not necessarily the best place to go.  You will want to spend some time researching which area banks provide commercial lending and specialize in working with government agencies to provide loan guarantees.  Your accountant or attorney can give you suggestions, but for the most reliable referral, your district Small Business Administration office is who you will want to contact.

hand offering pen for signature

The Small Business Administration is a government agency that specializes in providing government backing to small business loans.  Many start-ups take advantage of SBA guarantees, and those financial institutions that work closely with the SBA can receive a Preferred Lender status indicating their aptitude to quickly and efficiently process SBA guarantee requests.  Your SBA district office will have a list of lenders who fit this description.  Look for a lender who is a Preferred Lender Participant in as many categories as possible and is one of the top lenders of SBA approved loans.  Visit www.sba.gov for more information.

After creating a list of several banks that you would like to approach, visit them and ask to meet with a commercial lending officer.  You will want a good rapport with the bank representative.  They should be familiar with SBA programs, be able to give you feedback on your business plan, and guide you through the process of obtaining a loan.  Be prepared for them to ask you detailed questions on your business plan and your personal finances.

For more information on obtaining bank financing…

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