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While the idea of one giant small business loan to cover all your growth needs sounds ideal, it is usually better to approach a loan thinking only about the next step in your company’s future, not the next five. Planning to borrow only what you need for the next stage will make your application much more viable with banks.

Banks and other lenders, especially those making SBA (Small Business Administration) loans, want to know how you plan to use the borrowed funds. That means a specific, measurable goal, not just as a means of covering debt or as permanent working capital. The loan is meant to grow your business, bringing increased revenue for you and profit to the lender.

Before applying for a small business loan, it is a good idea to ask yourself some important questions. What is your goal for your firm for the coming year? Where do you want sales and profits to be and what do you need to do to get there? What is the minimum amount you need to borrow in order to achieve your goals?

Determining what your immediate business needs are, not necessarily all your wants, will make it easier to get your bank loan approved. For example, maybe you would eventually like to invest in your own warehouse and machinery, but what you really need at this stage is money for more marketing and promotion. If you can present the lender with a clear plan of why you need the money, how it will be used to grow your company, and how you plan to repay the loan on time, your case will be much stronger than if you simply ask for a large sum with vague intentions. After you realize your goals with the first round of funding, it will be easier to convince a lender to loan you money again the next time.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources