Finding loans in Atlanta for most small business has become a major hurdle for small entities due to the strict restrictions placed by the lenders. Despite the prevailing restrictions, getting a loan is sometimes necessary to fund the operations of your business. There are five major steps you need to understand how to get a loan for your small scale business.
Know the reason why you want the loan
You should clearly understand the reason you want to take the loan since the lenders are most likely to ask. You will probably need the loan to either start a small business, expand the existing one, to cover the operational cost or maintain safety cushion.
Decide on the type of lean that will be most appropriate for you
The reasons behind seeking the loan determine the type of loan you want. If you are seeking a loan to start a new business, it could be difficult to get a loan from most lenders since they require established businesses that will support the repayment of the loan. In this case, you can rely on borrowings from friends, relatives or microloans from selected non-profit lenders. For established businesses that are more than one year old, you have more options for loans such as term loans, SBA and term loans.
Know the best lender for small-business in the market
There are various lenders in the market and their loans vary. Compare several loans and pick the one with the lowest annual percentage rates. Consider banks loans if you have collateral, you have good credit, and you do not need the cash urgently. Banks offer large loans but take longer to be approved.
If your business is too small, consider using microlenders. They offer short-time loans with higher rates than the banks. When you do not have collateral, you do not have enough time to travel to banks for the loan application process, and you urgently need the money. They take about 24 hours to approve and thus are good for urgent needs. One shortcoming with this type of loan is that they do not offer large loans.
Check if you qualify for the loan
Check whether your credit score will be enough to take a loan. If it does not allow, consider other less strict avenues such as online business loans that are given to individuals with bad credit. Businesses that have been in operation for several years will also have a better chance for loans. If you have enough money and show the ability to easily pay, you will also have an easy time getting the loan.
Arrange your documents
Once you have settled on a lender, it will be time to apply for the loan. Most lenders will ask for several documents to approve the loan. The most common documents are tax return documents for business and individual returns. Other documents likely to be requested are your bank and financial statements. Legal documents for your business involving your business should also be ready before applying for the loan.