subject: Business Loan: Best Chance For Getting One [print this page] Business Loan: Best Chance For Getting One
To get a business loan, you must first try to build up your credit if it needs improving by using credit to spend, and then paying those required payments on time. One you have good credit, you need to decide how much money you will need, and you need to plan out your business plan because lenders will ask you what you are going to do with the money. Lenders will want to know your entire business plan to decide for themselves whether or not they think the business will fail or succeed. The more prepared you are, the more serious you will appear to be.
Lenders will be nervous about lending out a business loan if they think the business will fail because obviously, if the business fails, chances are, you will not be able to pay back the loan. Therefore, if you have assets that are worth as much as the amount of the loan you are asking for, you may be able to get a secured loan. That way lenders won't be nervous about the business failing because if it does, they know they will still be able to get the money back somehow.
Chances are, you will also enjoy lower interest rates with a secured loan because with unsecured loans, lenders only have your legal word that you will pay, so they tend to raise interest rates as a way to protect themselves just in case they are not paid back in full what they loaned you. This is especially true if they are nervous because of bad credit, no credit, or a business plan they do not think will be successful.
Lenders will also want to know when the business loan will be repaid, and what you will do if you don't get the loan. They ask you this because they want to see how serious you are, and how well you are able to think things out. They want to see that you are not the type of person to give up, and you will keep trying until you succeed.
