How do I qualify for a small business loan?

How much of my own money do I need to put in?

12 Answers

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  • Huh?
    Lv 7
    5 months ago
    Favorite Answer

    The 5 c's of credit still apply. Look them up if you haven't heard that phrase.

    There are too many factors to give you a decent answer.

    How much money do you need according to your business plan?

    How much have you raised already? (do you have skin in the game? a.k.a your own money at risk)

    How much are you looking to borrow?

    Do you have collateral?

    Do you have a comprehensive, well researched business plan ?

    What is your credit score?

    Do you have experience in the industry, at managing a business or other relevant skills for this business?

    Go to a SCORE Chapter or a Small Business Development Center in your state (assuming you are from the US) and get some mentoring services.

    There are lenders that will loan to small businesses that are not "bank ready," such as Community Development Financial Institutions." They make smaller loans, under $50,000 to credit worthy businesses. If you need to raise more money the requirements will be more stringent since the risk exposure will be more. Depending on the amount needed to raise other institutions might be a better bet.

    Update:

    The amount of money you will need to put in varies depending on the loan program, but a bank will want 20% minimum. Some of the non-traditional lenders may accept less. However when I refer to nontraditional lenders I mean CDFIs and other nonprofit, government supported lenders NOT the for-profit fee only lenders whose cost of capital could kill you business before you even get started. Understand the terms of the loan before you accept a loan form those folks, understand what it will actually cost you.

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  • 5 months ago

    Hi, there are secured and unsecured small business loans available in the financial sector. It all depends upon the credit score and eligibility with the required business proofs.

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  • Anonymous
    5 months ago

    ..............................

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  • olivia
    Lv 5
    5 months ago

    Build credit scores.

    Know the lender's qualifications and requirements.

    Gather financial and legal documents.

    Develop a strong business plan.

    Provide collateral.

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  • 5 months ago

    Build credit scores. Know the lender's qualifications and requirements. Gather financial and legal documents. Develop a strong business plan. Provide collateral.

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  • 5 months ago

    There is no magic about a small business loan. Until your business is substantial, has a long credit history and a verifiable history over a number of years of consistant income and profitability ..... any 'business loan' will be given on the basis of your personal creditworthiness and be, in fact a personal loan for which you are on the hook. It will be based on your personal credit score and be payable by you, regardless of the performance or survival of the business.

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  • Jay
    Lv 6
    5 months ago

    You have a detailed business plan that shows where the profits are and you take that to one of the nice people that sits at the desks at the bank.

    Need a business plan...try Fiverr.

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  • 5 months ago

    Good credit...collateral...

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  • Anonymous
    5 months ago

    Do not feed the teenage troll with a long history of childish questions.

    Like "How can I become the richest man in the world?"

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  • Anonymous
    5 months ago

    Unless you have an established small business with a documented history of profitable sales no one is going to give you a business loan. Otherwise it's whatever you can borrow yourself personally, which depends on your current income, assets, and credit history.

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