How to get a loan to start a small business? Where to get a soft loan to start a small business? What are the conditions for a loan to open a small business? The most common questions asked by initial entrepreneurs is where to get initial capital to start a business? If it is not possible to borrow money from parents, friends or get a loan from the state, there is one option: a bank. There is always money in any amount.
In this article, I will tell you how to take a loan to start a small business. What are the requirements of banks for beginners in business, and are there loans in favorable conditions for entrepreneurs of the last days and limited liability companies?
First, decide the amount you need. It is not necessary to take more than what is required, but the lack of funds is also undesirable. Ideally needed professional financial analyst to calculate all costs. Immediately consider whether you can provide the bank with a pledge, if necessary, and seek guarantees.
Step 1: Choose a bank and a loan program.
Banks offer dozens of varieties of loan programs for business beginners. Your goal is to choose the one that best suits your needs.
For starters, it is worth asking about offers at the bank whose services you use. Salary customers and those who have a deposit or checking account at a bank, banks offer more favorable conditions. Other important criteria:
Work experience – Do not trust the institutions that opened less than 5 years ago;
Financial indicators – if banks have nothing to hide, they publish financial reports on their site;
Comments from other entrepreneurs- who have already used the company’s services;
Availability of soft loans with state support – In case you manage to use these programs.
Step 2: Prepare documents.
For getting the loan from banks you need to prepare complete documents, below here is required list that you will need:
- the second document is preferably an INN;
- certificate of registration of intellectual property or LLC;
- fresh record extract;
- certificate of registration with the Tax Service;
- licenses and permits (if any);
- collateral documents (if you request a secured loan);
- business plan;
- Certificate of income (if applicable).
The bank has the right to demand other documents, for example, a list of properties purchased for doing business, an office lease, etc.
Step 3: Submit the application
All modern banks accept applications online. Fill out the form, submit and wait for the decision. Specify the most detailed and reliable data: the bank will carefully verify this information.
Do not try to hide important information for the lender: bankruptcy in the past, existing loans. The Bank’s Security Service is no less efficient than the police when it comes to verifying a borrower.
Banks will never take risks by granting loans to those who try to deceive them. On the contrary, they will put those citizens on the blacklist.
A significant part of the loans for beginner entrepreneurs is issued under initial payment conditions in the amount of 10-30% of the loan amount. Prepare this amount in advance and convince the bank that you have it.
Step 4: Conclude a contract.
The loan agreement is a serious thing. It depends on the financial well-being of your company and your own emotional and psychological well-being for many years. Paying for a contract that you did not read is dangerous and stupid.
I recommend that you familiarize yourself with the draft of this document in advance and read it at home, in a relaxed environment. Better yet, grant him a lawyer who understands the complexities and pitfalls of business loans.
What to look for:
- total interest rate;
- Payment program: is it convenient, does it fit your capabilities?
- the procedure to collect fines;
- conditions for advance payment of the loan;
- Obligations and rights of the parties.
At the same time learn commitment agreement If you take a loan with a guarantee. You must know your rights as the owner of the guarantee.
Step 5: Receive funds and open a business.
It only remains to receive funds in the current or cash account and open your business in them. Or the company will transfer money to the account of the seller from whom he buys the equipment or special equipment under the factoring or lease contract.