Other Added - 7 Steps To Get A Loan For Your Business

Loans are a time-tested way of raising capital for your business. We would love to tell you that it is as easy as going to the bank and asking for money, but as you probably know by now it is quite the opposite. We wrote the following steps to help you raise the right amount of capital to get your business going.

Step 1: Decide how much money you need.

This is an obvious but often misunderstood statement. Entrepreneurs, particularly start-ups, when budgeting for their business often focus on what they will need to get their business going, or to finance a particular project without accounting for working capital or cash for contingencies. This is dangerous because lack of working capital can mean the death knell for the business.

On the other hand, some entrepreneurs, again start-ups, drastically overestimate their costs. This will make lenders not only to question the entrepreneurs’ assumptions, but also question whether they know what they are doing.

Now that we decided on an amount, lets focus on the lender.

a) If you are a start-up:

Loan amounts below $25,000 are considered smaller, micro-loans. Not all banks will be interested in doing a SBA guaranteed loan for small amounts (more below). Micro-lenders and Alternative-lenders are better equipped to handle this type of loans. These lenders usually make smaller loans and have a community focus. Look to credit unions, local development corporations and other non-profit lenders.

A Small Business Administration (SBA) guaranteed loan is a guarantee to the lender. If the borrower defaults, the lender is guaranteed repayment of a portion of the loan by the SBA. You are still liable for the loan, so your obligation does not go away. From our experience, an amount of $50,000 and above is the usual range for SBA loans. The higher the amount requested the more the lender would look for collateral to secure the loans. Start-ups and existing businesses can apply for SBA guaranteed loans.

b) If you are an existing business:

If you own a company that has documented sales (you will need to show previous years’ tax statements) then you can apply for conventional bank loans. These loans are usually easier to apply, and may have lower interest rates. Normally for a conventional bank loan, you will need to be in operations for at least 2 years.

c) Set your expectations:

The bank does not want to own your business. It is highly unlikely that you will get a loan for a 100% percent of the project cost. You will need to put down a co-payment. Although the minimum co-payment varies by industry and lender, expect to put down at least 20%-30% or more of the cost of the project.

Step 2: Find out your credit score.

You should check your credit score and look over your credit report to make sure there are no problems. A credit score of above 650-680 is considered “Good”, but it does not mean you will get a loan. A credit score in the 700-800’s is very good and increases your chance of getting approved.

You can request your credit report from one of the reporting agencies, or use one of the many online services available to check your score.

Step 3: Start researching your options.

Start weighing all your options. Think of ways to strengthen your loan application. Can you find a co-signer? Bring in a partner with good credit or experience? Invest more cash into the business? If you think that you are not a strong candidate for a business loan, you can present the lender with options to increase your chances.

Step 4: Start writing the business plan and create the financial projections.

The business plan is more than a plan—it is a tool that helps you evaluate your business concept, your product or service, and discusses how to implement your ideas. A business plan is also a tool to obtain investors, lenders, and strategic partners. You can find many resources and opinions on the Internet as well as your local bookstore on how to build an effective business plan. A lender will usually require a comprehensive business plan as well as a projected 1-year cash flow projection (month-by-month), 3 years income statements, a balance sheet, a statement of sources and uses of funds, and a loan amortization schedule. One mistake that we usually see is that the figures on the Business Plan do not match the figures on the financial projection. Double-check your work before sending it to the bank.

Step 5: Find a lender

Finding the right lender is not easy; each lender has its own criteria for lending. However you can use the list below to get an idea of what type of institution is a better fit for your loan needs.

a) Commercial Banks Top Five Publicity Myths
Most people consider getting publicity the most important part of public relations. It's also very mysterious to many people. Here are my top five publicity myths, to help make publicity better understood.1. Who you (or your publicist) knows at the media is more important than the story idea. Sure, it's easier to get a reporter or writer that knows you to listen to your pitch. But unless the pitch is good, it doesn't matter if your contacts are your best friends -- they won't risk their jobs on your bad idea.2. The amount of time spent on an interview determines how much publicity you will receive. I know people who have been interviewed for an hour and a half, and have only received a line in a publication (or none at all). I also know people who were interviewed for 20 minutes who received a half-page profile. It all depends on the story the writer is putting together, who else they are interviewing, and editorial decisions.3. You have control over the information presented. One of the differences between advertising and publicitean the death knell for the business.

On the other hand, some entrepreneurs, again start-ups, drastically overestimate their costs. This will make lenders not only to question the entrepreneurs’ assumptions, but also question whether they know what they are doing.

Now that we decided on an amount, lets focus on the lender.

a) If you are a start-up:

Loan amounts below $25,000 are considered smaller, micro-loans. Not all banks will be interested in doing a SBA guaranteed loan for small amounts (more below). Micro-lenders and Alternative-lenders are better equipped to handle this type of loans. These lenders usually make smaller loans and have a community focus. Look to credit unions, local development corporations and other non-profit lenders.

A Small Business Administration (SBA) guaranteed loan is a guarantee to the lender. If the borrower defaults, the lender is guaranteed repayment of a portion of the loan by the SBA. You are still liable for the loan, so your obligation does not go away. From our experience, an amount of $50,000 and above is the usual range for SBA loans. The higher the amount requested the more the lender would look for collateral to secure the loans. Start-ups and existing businesses can apply for SBA guaranteed loans.

b) If you are an existing business:

If you own a company that has documented sales (you will need to show previous years’ tax statements) then you can apply for conventional bank loans. These loans are usually easier to apply, and may have lower interest rates. Normally for a conventional bank loan, you will need to be in operations for at least 2 years.

c) Set your expectations:

The bank does not want to own your business. It is highly unlikely that you will get a loan for a 100% percent of the project cost. You will need to put down a co-payment. Although the minimum co-payment varies by industry and lender, expect to put down at least 20%-30% or more of the cost of the project.

Step 2: Find out your credit score.

You should check your credit score and look over your credit report to make sure there are no problems. A credit score of above 650-680 is considered “Good”, but it does not mean you will get a loan. A credit score in the 700-800’s is very good and increases your chance of getting approved.

You can request your credit report from one of the reporting agencies, or use one of the many online services available to check your score.

Step 3: Start researching your options.

Start weighing all your options. Think of ways to strengthen your loan application. Can you find a co-signer? Bring in a partner with good credit or experience? Invest more cash into the business? If you think that you are not a strong candidate for a business loan, you can present the lender with options to increase your chances.

Step 4: Start writing the business plan and create the financial projections.

The business plan is more than a plan—it is a tool that helps you evaluate your business concept, your product or service, and discusses how to implement your ideas. A business plan is also a tool to obtain investors, lenders, and strategic partners. You can find many resources and opinions on the Internet as well as your local bookstore on how to build an effective business plan. A lender will usually require a comprehensive business plan as well as a projected 1-year cash flow projection (month-by-month), 3 years income statements, a balance sheet, a statement of sources and uses of funds, and a loan amortization schedule. One mistake that we usually see is that the figures on the Business Plan do not match the figures on the financial projection. Double-check your work before sending it to the bank.

Step 5: Find a lender

Finding the right lender is not easy; each lender has its own criteria for lending. However you can use the list below to get an idea of what type of institution is a better fit for your loan needs.

a) Commercial Banks Making Direct Mail Work for Small Businesses
If you own a small business, then you know the value of affordable and effective marketing. Unfortunately, many traditional and online advertising methods are becoming quite expensive. This article will explain direct mail guidelines and methods.Direct mail is an often over-looked method that can be very effective if executed properly. There are three guidelines to follow when conducting an effective direct mail campaign:1. Catch the reader's attention immediately. You only have a few seconds to do this before your mail ad is thrown away as junk mail. Therefore, opt for postcard mailings instead of sending your offers in an envelope. If your business is relatively small and unheard-of, the reader will never open it unless your company's name is familiar to the reader. Envelope advertising is cheaper than postcard advertising, but is only effective if you have already built up name recognition.When using the postcard method, you will need to be able to print images on the card. I highly, highly recommend investing in a quality home photograigation does not go away. From our experience, an amount of $50,000 and above is the usual range for SBA loans. The higher the amount requested the more the lender would look for collateral to secure the loans. Start-ups and existing businesses can apply for SBA guaranteed loans.

b) If you are an existing business:

If you own a company that has documented sales (you will need to show previous years’ tax statements) then you can apply for conventional bank loans. These loans are usually easier to apply, and may have lower interest rates. Normally for a conventional bank loan, you will need to be in operations for at least 2 years.

c) Set your expectations:

The bank does not want to own your business. It is highly unlikely that you will get a loan for a 100% percent of the project cost. You will need to put down a co-payment. Although the minimum co-payment varies by industry and lender, expect to put down at least 20%-30% or more of the cost of the project.

Step 2: Find out your credit score.

You should check your credit score and look over your credit report to make sure there are no problems. A credit score of above 650-680 is considered “Good”, but it does not mean you will get a loan. A credit score in the 700-800’s is very good and increases your chance of getting approved.

You can request your credit report from one of the reporting agencies, or use one of the many online services available to check your score.

Step 3: Start researching your options.

Start weighing all your options. Think of ways to strengthen your loan application. Can you find a co-signer? Bring in a partner with good credit or experience? Invest more cash into the business? If you think that you are not a strong candidate for a business loan, you can present the lender with options to increase your chances.

Step 4: Start writing the business plan and create the financial projections.

The business plan is more than a plan—it is a tool that helps you evaluate your business concept, your product or service, and discusses how to implement your ideas. A business plan is also a tool to obtain investors, lenders, and strategic partners. You can find many resources and opinions on the Internet as well as your local bookstore on how to build an effective business plan. A lender will usually require a comprehensive business plan as well as a projected 1-year cash flow projection (month-by-month), 3 years income statements, a balance sheet, a statement of sources and uses of funds, and a loan amortization schedule. One mistake that we usually see is that the figures on the Business Plan do not match the figures on the financial projection. Double-check your work before sending it to the bank.

Step 5: Find a lender

Finding the right lender is not easy; each lender has its own criteria for lending. However you can use the list below to get an idea of what type of institution is a better fit for your loan needs.

a) Commercial Banks Prevent Your Business From Falling Victim To Dial Through Fraud
What steps would you take to protect your business from a burglar coming in after office hours and stealing ?40,000? I suspect that you would make sure that all the doors have very good locks. You would install a burglar alarm and maybe even have CCTV surveillance. That should protect your business. Wrong! The burglar did not break into your office; they broke into your internal phone exchange (PBX). Unseen by human or electronic eyes, thousands of pounds are being spent on international telephone calls and your business will pay the bill.How Does It Work? Dial through fraud is not a new problem, it just has limited publicity. It exploits a PBX feature that allows employees to ring in to the switchboard and by keying certain dialling codes, make national and international calls for which the company will pay the bill.Many businesses will take an "It will never happen to me" approach to dial through fraud, even though most business PBXs are setup to be maintained remotely. This is to allow engineers from a maintenance compaind out your credit score.

You should check your credit score and look over your credit report to make sure there are no problems. A credit score of above 650-680 is considered “Good”, but it does not mean you will get a loan. A credit score in the 700-800’s is very good and increases your chance of getting approved.

You can request your credit report from one of the reporting agencies, or use one of the many online services available to check your score.

Step 3: Start researching your options.

Start weighing all your options. Think of ways to strengthen your loan application. Can you find a co-signer? Bring in a partner with good credit or experience? Invest more cash into the business? If you think that you are not a strong candidate for a business loan, you can present the lender with options to increase your chances.

Step 4: Start writing the business plan and create the financial projections.

The business plan is more than a plan—it is a tool that helps you evaluate your business concept, your product or service, and discusses how to implement your ideas. A business plan is also a tool to obtain investors, lenders, and strategic partners. You can find many resources and opinions on the Internet as well as your local bookstore on how to build an effective business plan. A lender will usually require a comprehensive business plan as well as a projected 1-year cash flow projection (month-by-month), 3 years income statements, a balance sheet, a statement of sources and uses of funds, and a loan amortization schedule. One mistake that we usually see is that the figures on the Business Plan do not match the figures on the financial projection. Double-check your work before sending it to the bank.

Step 5: Find a lender

Finding the right lender is not easy; each lender has its own criteria for lending. However you can use the list below to get an idea of what type of institution is a better fit for your loan needs.

a) Commercial Banks Medical Billing - Advanced Report Generation
Previously, we talked about how most DME medical billing software programs have report generation capabilities and discussed the basics of how data is pulled in these programs. In this installment we're going to discuss some advanced medical billing report concepts. If you think you won't use some of this, you haven't been in the business long enough.One of the most common reports is patient labels. The reason is simple. When you are billing a patient, you don't want to have to address each envelop by hand. But because medical billing software is not a label making program, this function is usually neglected as far as making it part of the program itself. So what they do is include a report generator that will print out patient records in a format that will fit on a mailing label. Some programs include the actual format. Others make it so that you have to provide the format yourself, meaning you have to go into the report generator and program the label format yourself.The way most programs all you to do this is simple. You go to the rep evaluate your business concept, your product or service, and discusses how to implement your ideas. A business plan is also a tool to obtain investors, lenders, and strategic partners. You can find many resources and opinions on the Internet as well as your local bookstore on how to build an effective business plan. A lender will usually require a comprehensive business plan as well as a projected 1-year cash flow projection (month-by-month), 3 years income statements, a balance sheet, a statement of sources and uses of funds, and a loan amortization schedule. One mistake that we usually see is that the figures on the Business Plan do not match the figures on the financial projection. Double-check your work before sending it to the bank.

Step 5: Find a lender

Finding the right lender is not easy; each lender has its own criteria for lending. However you can use the list below to get an idea of what type of institution is a better fit for your loan needs.

a) Commercial Banks

Banks are one of the largest small business lenders but their approach to lending varies. Commercial Banks decisions are based on your strength as a borrower (a good credit score, personal financial statements, experience and collateral) the banks goals for the period and their lending philosophy. Banks may be looking to expand their small business loan consumer base; others may focus on larger loans or a specific industry.

You will need a high credit score if you are applying for a bank loan (with or without the SBA guarantee). Although, this is not an absolute rule for all banks, we found that a credit score over 700 is a better predictor on the success of a loan application. The bank may look for collateral (home equity, saving, etc) if you are applying for amounts over $50,000.

The borrower’s personal financial situation is key for the application. The bank’s underwriter will analyze the person’s net worth; as well as look at her previous earnings, length of credit history, among other factors.

For lower amounts the bank may not require a business plan. However, if there is a particular weakness in the loan application, the loan officer may ask the borrower to submit a business plan and financial projections.

b) Non-Bank lenders

These institutions do not conduct consumer banking but offer business services and business loans. Lenders’ requirements vary depending on the institution, and some prefer lending to specific industries. The Non-bank lender may take longer to process your loan application than a regular bank, but they can approve loans that banks find too risky.

Non-Bank lenders usually require a business plan and ample documentation with the loan application. Compared to banks these lenders have more flexibility working with lower credit scores as long as the borrower has the necessary experience and collateral.

c) Region specific Lenders

There are neighborhood specific for-profit/non-profit lenders that have more flexible lending terms. For example: Credit Unions and Community Development Organizations may lend to specific neighborhoods. The nature of your business and the reason why you are requesting the loan should fit with the organizations’ goals.

d) Micro and Alternative lenders Micro and Alternative Lenders lend to riskier borrowers. These borrowers usually have low credit scores or they are just building credit, also they don’t have a strong financial history and have little or no collateral. These institutions lend lower amounts and charge higher interest rates.

Step 6: Prepare the loan application package A “Loan Package” is the paperwork you submit to the bank in order to apply for a loan. The Loan Package includes the following:

• Business Plan
• Business Financial Projections
• Personal Financial Information
• Personal Tax Statements
• Information about business, location, sales contracts, etc.
• Business Owners’ Resumes

Step 7: Waiting

Loan applications are approved or declined much quicker than people think. A lender can approve an SBA express loan within 36 hours. Regular commercial loans have similar processing times. You should expect to get an answer within 2 weeks, and hopefully close the loan (get access to the money) within another 2 weeks. However, if the institution needs more documentation, or if the loan is for a larger amount, then it might take longer to process the loan, especially SBA loans.

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