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Blog June 2012


What to Look For in Your Business Loan Agreement’s Fine Print

Blogged By: 
Caron_Beesley, SBA Community Moderator

Applying for a business loan and securing its approval can be a lengthy process. The actual approval time varies widely depending on the type of loan, its complexity, and the borrower’s timeliness providing the necessary information. This guide from SBA can help you gather the right paperwork, whether you’re applying for an SBA loan or a regular business loan.

But knowing exactly what you’re signing up for is just as important as rounding up the details and completing the paperwork accurately. If you’ve ever purchased a car and found yourself surprised when extra line items turn up on your monthly billing statement, then you’ll know the feeling. With loan agreements, there are devils in the details. That’s why it’s critical to pay attention to the fine print, often found in the promissory note or security interest section of the agreement.

Here are some tips for what to look for and how to avoid potentially costly mistakes:

Common Details Buried in the Fine Print

Some of the key terms that make up a loan agreement aren’t always as explicit as one might hope. The fine print, for example, can include detailed and complex technicalities, qualifications or restrictions of the agreement, and even vital information about the loan’s terms. Things to look out for include:

Prepare for Hurricanes, Disasters by Safeguarding Tax Records

Blogged By: 
irs.gov

IRS YouTube Videos
Preparing for Disasters:
 Spanish | ASL

With the early start of this year’s hurricane season, the Internal Revenue Service encourages individuals and businesses to safeguard themselves against natural disasters by taking a few simple steps.

Create a Backup Set of Records Electronically

Taxpayers should keep a set of backup records in a safe place. The backup should be stored away from the original set.

Turbulent Times Bring New Opportunities

Blogged By: 
Ed Cadena, SBA Nevada District Director

Yes, it’s true that turbulent times can bring a fresh start. We’re inspired by Fortune 500 companies that started with next to nothing. Whole Foods, launched by a college drop-out with money saved and borrowed from friends, posted $6.2 billion in revenues in 2008. Michael Dell ran Dell from his dorm room, until he decided to drop out of college to run his company full time. Apple was started by two friends in a garage. Nordstrom’s, Starbucks, Ebay, and yes, Facebook are all astounding success stories of companies started by someone with a dream and very little else.

Perhaps you have a passion that you dream about translating into your own business – and now seems the right time. You may be asking, “Is entrepreneurship for me?” As exciting as charting a new path can be, it can be a daunting challenge as well.

Business Loan Application Checklist

Blogged By: 
MBDA

Credit AgreementState and local economic-development agencies – and numerous nonprofit organizations – provide low-interest loans to small business owners who may not qualify for traditional commercial loans.

When it comes to applying for these loans, the good news is that most of these other lenders require the same kinds of information. Of course, each loan program has specific forms you need to fill out. But for the most part, you’ll need to submit the same types of documentation. So it’s a good idea to gather what you’ll need before you even start the application process.

Here are the typical items required for any small business loan application:

Loan Application Form

Forms vary by program and lending institution, but they all ask for the same information. You should be prepared to answer the following questions. It’s a good idea to have this information prepared before you fill out the application:

Determining Your Financing Needs

Blogged By: 
MBDA

ROIBefore you seek financial assistance, you should thoroughly assess your current financial situation. Ask yourself the following questions to determine your business' financing needs:

Do you need more capital or can you manage the existing cash flow?

If you are having trouble paying your obligations on time, you may need an infusion of working capital.

What is the nature of your need?

Do you need money to start or expand your business or as a cushion against risk?

How urgent is your need?

Whenever possible, it's better to anticipate your needs rather than looking for money under pressure. It is harder to gain approval for a loan when your company is already in trouble, so plan ahead and secure financing well in advance of a crisis.

How great are your risks?

All businesses carry risk, and the degree of risk will affect both the cost of your loan and available financing alternatives.

In what state of development is your business?

Needs are generally more critical during transitional stages - start-up and expansion being two of the most urgent and costly.

Did you know...

MBDA Minority Business Centers helped clients secure contracts totaling $6.9 billion during the last 5 fiscal years.
Graph for Dollar Value of Contracts

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