Borrowing for Your Small Business

Preparation is Key

To be successful in obtaining a loan, you must be prepared and organized. Be ready to answer questions about your business and be ready to highlight your financial performance. Having a good business plan and a loan proposal that has been carefully thought out can be very helpful. You must know exactly how much money your company needs, why you need it and how you will pay it back. Be prepared to explain (in some detail) why you need the money. Some key variables as to what kind of loan terms you can get are length of time in the business (your track record), and the amount needed in relation to the size of your company.

 

You want to include the following:

  • Other key personnel involved in running the business and their responsibility for using the loan proceeds
  • How you plan to repay the loan and over what time frame
  • That you are willing to take a significant financial risk in the business
  • An overview of the market including your projected customer base and competition
  • Personal and business tax returns and financial statements and, if possible, collateral that can secure the loan

You may also be asked to supply additional supporting documentation. Bring your accountant if you need help.

You must also be able to show your lender that you and your business are a good credit risk. Most small businesses are closely tied to the know-how and overall character of the owner(s). Therefore, you need to make sure that you get your own financial records in order before asking a bank (or any lender) for money to operate your business.

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Heartland Bank and Heartland Planning Associates are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Heartland Planning Associates, and may also be employees of Heartland Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Heartland Bank and Heartland Planning Associates. Securities and insurance offered through LPL or its affiliates are:

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