Everybody knows that starting a small business can be tricky and takes a lot of dedication, but feels so good when you finally succeed. It's getting the small business loans that you might need to get started that can be really confusing. Fortunately, there are many ways to get more information on this subject from bankers, books, and loan companies.
Traditional Bank Loans
Now, one thing that is known for certain is that banks have much tighter lending policies than other financial institutions, which means that there are more hoops and red tape to get through, but if you can land yourself a bank loan, you also get some financial security, and many other benefits that come along with this type of loan. Generally this is where you will find one of the best interest rates as well. To get a loan through a bank you will need to make an appointment with a financial adviser through your bank. You can shop around at different bank brands until you find one that has the best rate for you, and then you may need to fill out an application, or the associate you speak with will have questions to ask you so that the information gets filed in their system. This will include a background and credit check, and a check of your current financial standing, which will tell them whether or not they want to approve you.
Government Loans
Government small business loans are another way that can be a little bit more difficult to obtain due to the competitive nature of these loans. Usually the government only has so much to give to small businesses each year, but if you don't apply then you'll never know. You can generally apply through the federal or state government, and applications can be found online, or by calling the branch of government you are applying through for more information. They may be able to mail you an application form. Government loans and government grants are two different things, but if you are seeking money and you don't want to pay it back, you may want to look into a government grant as well as many state governments have special programs for new small business owners to help get them started.
Home Equity
One of the easiest ways to obtain small business loans for a startup is through your home equity, but this can be a dangerous manner of borrowing if you're not careful, which is one reason that many banks have begun to cut these lines and imposed more strict loan to value ratios so that you don't end up losing your home during the beginning of your new business. If this is something that you're seriously interested in, you will still need to go through your bank to complete this process. Usually you must go with the institution that your mortgage went through, but if your house is paid off in full, you can try using the bank through which your home insurance is purchased, or shop around.