Business loans are tricky, but sometimes worth the gamble to get through a difficult situation. Other times they may be your only option, especially if you are trying to start up a company. Whether you’re just beginning a business or needing a loan to keep your business going strong until times get better, here are some pointers.

First of all, preparation can go a long way toward preventing problems. If you make a habit of putting aside money for emergencies, you will find that you are in the same boat as many other business owners who eventually have to dip into their savings. This prevents business loans from becoming a necessity and can save you from going into unnecessary debt if done correctly.

When savings haven’t been planned for or just don’t go all the way, there are several places you can go for help. The government’s Small Business Administration (SBA) provides programs for many situations you may encounter. If your business doesn’t meet their standards, try approaching a bank to borrow the necessary funds. You may have already done this to start your company up, but just in case you haven’t, be aware that you will need a thorough business plan. Outline exactly what you intend to do with the business loan in order to bridge the gap between your current financial troubles and future prosperity. Bankers are greedy, so don’t leave out your intentions for a single dollar. Show them your timeline for paying the loan back. If they feel that you aren’t confident in your business or haven’t thought the loan through, they will consider you a high risk customer and your loan will be denied—so it’s important to be confident, professional in appearance, and intelligent in your layout of a practical plan.

It’s crucial to put a lot of careful thought into acquiring substantial debt, and a business loan is no exception. Will these funds help your business expand in new ways, or is the loan merely going to make life more comfortable for your business? Do you need the loan to help your business survive? Unless the money will cover a pressing need or provide dramatic, profitable growth, it might be wiser to simply let the company shrink a little until business gets better naturally. If you decide that you do need the loan, put your best foot forward. Select your most competent employees or directors to make the plan presentation at your chosen bank. Getting a business loan can sometimes boil down to having the right people. Make sure that the right people put the plan together, and that the right people make the presentation. Sometimes these won’t always be the same people. If you feel that one of your employees is more analytically minded, they might be better suited to creating the business proposition. Don’t send a socially inept representative to the bank, or you might ruin your chances.

But above all, be resilient. By nature, many business owners already are. The odds are not in your favor, so if you don’t get the first business loan, ask the representative why and learn from your experiences. Sooner or later your persistence will pay off.


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