If you are considering small business start up loans, you probably have a lot of questions. Whether you own a company, want to expand or are thinking of starting a new company, you have many options available. The best choice is to consider the SBA, state or local agencies and nonprofit options first, especially if you do not qualify for a traditional loan because of bad credit. However, it is important to determine your needs, as well as have everything together.
Your Needs
The first thing you should consider is your needs for your company. Do you need more capital or is there another reason you require the loan? Is your company doing well or are you failing? What are the risks? These questions are important to ensure that you are using the money appropriately.
Financial Statements
You will be asked for financial statements, such as bank statements and others. Everyone who owns over 20 percent of the company will be required to submit financial statements. Not all loan packages will require you to submit these documents, but most will require at least one year’s worth of statements with the application.
Credit Report/Score
Even if you have a poor rating, you will still need to submit a company report. However, those requiring start-up capital will not be able to show such a report and may be asked for personal reports. Don’t get discouraged, because a poor rating doesn’t necessarily mean you won’t get the loan.
Company Plan
You will be required to submit a business plan and be able to show why your loan will help achieve the goals set forth by the plan. If you already have one, you can update it. Otherwise, you will need to create one.
Other Legal Documents
Other legal documents could be required, such as licenses your company has, commercial leases, franchise agreements, copies of pertinent contracts and more.
Collateral
The use of collateral is different for every lender and is only required with secure small company loans. In most cases, unsecured loan packages will not be available to you because of your poor rating, so you will need to have something of worth to use in case you default on the loan. This can include a home, vehicle and more. However, even those with a poor rating may not need collateral if your financial statements and plan are in good order.
Small business start up loans with bad credit aren’t impossible, but will require you to do a little extra research and work. Visit Biz4Loans today to get started or contact at (888) 943-1497!
