Form a Business Plan

• There are many places at which you can apply for a business loan, but wherever you apply, they will want to see a business plan. This will be the most important part of the loan application. The plan for starting a new business is more difficult than a plan for an existing business because you will have to use projected numbers instead of actual numbers. The plan must consist of what your business will be and how you plan to run it. Projected income and expenses, number of employees and location are all important parts of a business plan. You can get help with the business plan by contacting the Small Business Administration (see Resources below).
  
  

The Lending Institutions

• There are several lending institutions that lend on businesses. One of the first places to try is the bank at which you have your business checking account. Many times, they will grant a line of credit for your business secured by your signature. These lines of credit are normally reserved for businesses that have a proven track record. However, if the owner has years of experience in the field and is just opening his or her business, they will be more lenient. They also will take into consideration the owner's credit score.
  
  Some lending institutions are not banks, such as the Small Business Loan Source. They usually can fund a loan faster with fewer requirements than banks can. They use the Small Business Administration programs to help people get funding who do not qualify through traditional means. Of course, if you have good credit, experience and/or a long running business, there should be no problem getting a loan from a traditional bank. Terms of business loans vary from one lender to another, but they usually are variable rate loans, with a balloon payment at the end of a term. Most lenders will renew the loan for a fee at the end of the term if you have made your payments on time.
  
  

Credit Cards

• Many of the larger credit card companies offer business credit cards. They may start you off with a smaller limit than you want, but as you keep the payments current, they will increase your available credit. You can apply for these online or by mail. They also have variable rates, and most will have a different rate for cash advances than for regular purchases. These types of loans can be an excellent way of keeping track of what you are spending money on because they send you a statement and include the amount spent in a category. This makes it easy to transfer to your bookkeeping system. You must be careful to make your payments on time, though. They will include a default rate which will be very high if you are late with your payment. Compare the credit cards to get the best rate and terms for your business.