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.
State 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:
Before 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.
Ninety-six percent of the world’s consumers live outside of the United States and represent two-thirds of the world’s purchasing power. U.S. companies that export enjoy business success with increased sales and profit potential. Exporting also helps businesses weather downturns in the domestic economy by being prepared to respond to foreign competition and global market trends.
Applying for disaster recovery assistance from the U.S. Small Business Administration just got easier thanks to revisions made to its electronic loan application, significantly reducing the number of screens an applicant must read while filling out the form.
“Our goal is to provide support for those rebuilding after a disaster, and we wanted to make the process more user-friendly,” said SBA Administrator Karen G. Mills. “Whether it’s a hurricane, tornado, earthquake or devastating flood, the SBA can step in to help communities get back on their feet by providing access to both home and business recovery disaster loans. To make the loan application process more streamlined and simplified, we have taken a different approach with the online applications. This improvement will make those first steps toward recovery more convenient.”
The new online application is easier to read, and users will spend less time filling out the form.
The original electronic loan application—launched in 2008—guided applicants through a series of 80 screens, based on responses to questions aimed at determining eligibility. Now, applicants for disaster assistance can fill out a form on SBA’s secure website that looks exactly like the paper application, four pages for home loans, and three pages for business loans.