Beretta Only: HOW TO GET A SMALL BUSINESS LOAN IN 4 EASY STEPS

Friday, November 16, 2018

HOW TO GET A SMALL BUSINESS LOAN IN 4 EASY STEPS

Entrepreneurs usually need to finance a new business. However, clinching the funding can be quite the task. Here are 4 easy steps to get your business loan.

1. Ask yourself why you need the money? Is it for start up costs, managing daily expenses, bringing on new employees or to grow your current business? You will need to decipher the reason for your loan.

2. Find out what you qualify for. Finding out your credit score is a huge factor that will determine which loans you may be approved for—there is no sense applying for a loan that you will be denied. You can get your free credit report from Equifax, Experian and TransUnion once a year; and you can also downloads apps such as Credit Karma that will update you daily. Traditional banks want a borrowers credit above 680. In addition to your FICO score lenders will want to know how long you have been in business or if you are a start up business.

3. Gather your documents. Regardless of the lender you choose, you will need to have your documents gathered for the application process. Generally, the documents will be the same for all lenders: business and personal tax returns, business and personal bank statements, business financial statements and all legal documents (articles of incorporation, franchise agreement, etc.).

4. Determine the best lender. Once you decide the type of lender that is best for you—you will want to compare a few options based on annual percentage rate and terms. You have choices when it comes to the type of lenders; you can choose from banks, micro lenders and hard money lenders.

THINGS TO CONSIDER WHEN CHOOSING A HARD MONEY LENDER LENDER

BANKS: A traditional bank will provide a small business loan that ranges from about $5,000 to %5 million. The average loan size is right around $370,000. You will need to prove you have collateral, good credit and you will not need the cash quickly. Getting funded takes longer than other options— typically about 6 month. The positive in a bank loan is you will receive the lowest APR option.

MICRO LENDERS: Micro lending are nonprofits that lend short-term loans in smaller amounts—typically less than $50,000. Micro lenders are lenders have more of an interest in development versus earning a profit. Their main goal is to help entrepreneurs who do not have the qualifications for a traditional bank loan. They usually provide training to teach the lenders how to run a business. Because, traditional loans are not approved easily without stellar credit and a cash reserve. A micro lender may be an avenue to explore as long as you do not mind taking required trainings and having a lender “lead” you to success—also, this funding is a smaller amount than other options.

HARD MONEY LENDERS: Hard money lenders usually do not have a required minimum FICO score. Therefore, this can suit an entrepreneur with fair or poor credit. Hard money lenders lend off of hard assets (real estate) not credit. When it comes to hard money loans. You are using your business’s commercial real estate as collateral. The loan you receive will be heavily based by the collateral you have to offer. Typically, hard money lenders are smaller lending organizations that believe in the value of taking on risky deals.

There is a small business loan for every borrower. It is important you look at your credit, your business projections, your assets and what you can realistically pay back monthly.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.