subject: Loans For Small Business- A Guide For You [print this page] It can be quite a daunting task to start your own small business if you do not have adequate funds. You can think of getting loans for small business as this is the most important aspect apart from marketing strategy for the success of your small business. You can try and find out how you can get money at a reasonable rate of interest. You must also look for a lender who can lend you money at your convenience.
Small business funding and franchisee financing have become very popular using which you can kick-start your small business easily. You have to meet some criteria if you require loans for small business. Your credit history will be analyzed before extension of a loan by the lender. You can get loans for small business easily if you have a strong credit record.
You will easily get approval if your financial record is good. You must also be able to convince the lender about repayment of the money that is borrowed by you. For this you can show details regarding your customers and proof of income. The lender can make his decision of lending to you based on these details.
The bank can also make available a franchisee loan for your use. If you already have a good relationship established with the bank this will be easy for you. In case you have been out of business temporarily getting funds can become a problem.
In such a case you can try and get unsecured loans from some lender. As far as loans for small business is concerned two other strategies that have evolved are getting an IRA/401K loan which will not incur tax penalties or getting a securities loan.
Employees can take loan from their 401(k) retirement savings. The
401(k) plan allows a worker to invest his savings made towards retirement and enables him to put back current income taxes on the saved money until withdrawal. A part of his or her wages gets deposited automatically into the 401(k) account. These payments are also known as contributions.
The other strategy related to finance for small business is security loans which permits entrepreneurs to maintain ownership of their stocks and borrow up to 95% of the value of the stock. In this case the borrower has to provide some form of collateral to the lender such as a letter of credit, cash or government securities.
In this way the lender can become confident that the loan will be repaid. This type of loan involves a lower interest rate and offer more flexible repayment terms than unsecured loans. This type of loan can be used for other purposes such as financing home improvements, refinancing expensive debt and others.
