Funding for small businesses is always a challenge.  Here are some tips that may help.

  • Research and prepare:  Determine which banks participate in government programs and are familiar with your industry and target market.  Find out what documents are required.  Have a relatively short business plan that will answer lenders’ questions.  Some lenders and small business advocates offer business loan checklists with information about required financial statement projections and copies of cash flow.
  • Get advice on SBA loans:  Government offices can provide SBA loan application checklists.  Consider attending workshops that SCORE and the Small Business Development Center offer and work with their consultants.
  • Be up-front with lenders:  Demonstrate your ability and willingness to repay the loan without making broad, unsubstantiated statements about your finances.  Be conservative about asset lists, collateral statements and financial projections.  Be willing to discuss risks and financial projections.  Be willing to discuss risks and answer questions about how you will manage them.
  • Be persistent:  Consider going to other lenders or banks even if you are denied.  Seek out referrals from successful entrepreneurs, associates, acquaintances and friends.
  • Lower start-up costs:  Lease equipment, start out leaner and take other measures to scale down the business and increase odds of qualifying.  Show how a franchise business model will help.
  • Calculate carefully:  Examine expenses closely to account for non-recurring expenses, account for all revenue with cash businesses, show how you’ve paid past bills, loans, vendors and include personal credit reports.  Get accurate real estate appraisals on property.
  • When credit is blemished:  If it’s because of medical bills or a unique situation, explain it.  Before applying, work diligently to repair your credit.  Show you’re willing to risk your own money with a reasonable down payment.

Thanks to my sources, the US Small Business Administration and The Desert Sun newspaper.

Best regards,

John Pivinski
Vision Marketing of Palm Springs


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