Small Business Loan
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Small Business Loan refers to the amount of money borrowed by an aspiring small business owner to set up or to run or to expand a small business. So, the small business loans provide necessary economic support to a person who is willing to own a small business or already owns one. There are many advantages of availing a small business loan. Small Business Loan covers all the monetary need of the small business and is available on easy terms and conditions. If a person is able to get small business loan before starting the small business then has not to face any initial financial problem. Moreover, the small business loan boosts the marketing strength of the small business.These small business loans can be availed from different sources like banks, large business organizations and government. The type of small loan actually depends on the personal requirement and the personal repayment capabilities of the small business owners. The various kind of small business loans a person can get are as follows:
Micro loans
Micro loans refer to the small loans which are given to set up new small businesses. Though amount of credit varies, the maximum term of repaying micro loans are generally six years. Micro loans can be availed only if
1) The aspiring small business owner possess a complete business training
2) An impressive business plan along with well designed market strategies is submitted
3) There are strong chances of financial profit.
Government loans
Most Governments offer various kinds of loans to lend a support to the small businesses. There is generally no limit on the loan amount as the governments are really interested in promoting small business ventures. The terms and conditions of repayment are fixed by preparing an agreement signed by the government and borrower. If a person wants to avail this opportunity of taking a loan which has no limit on loan amount, he has to meet the following criteria:
1) The small business owner has to convince the govt. that his business will be a sincere and authentic venture. He has to serve complete details along with his business plan to the government. Govt. generally believes that if somebody invests his own money in his business then he will be much more determined to earn profits and achieve success.
2) A strong business plan clearly stating the probable profits should be submitted to the government.
3) The schedule of repayment must be clearly discussed.
4) The person applying for small business cannot have any criminal record.
Government offers special loans to worthy businesses or to the people who are unemployable. Some of these loans are:
Loans from banks
Banks provide loans to small businesses if its future growth prospect and prospective profit figures are presented clearly to the bank. Otherwise getting a small business loan from a bank may be proved to be a difficult task. It is very important to mention that there is Debt and Interest associated with a bank loan and it is essential to make a general agreement between the bank and the borrower. The several ways to ask for a bank loan are
1) Request for credit 2) Request for partnership in small business 3) Request for grants with debts 4) Request for free assistance
Loans by the Large Business HousesLarge Business houses also give loans to the small businesses but in order to get the loan the small business has to engage itself in some form of partnership with the in
vestor that is with the large business corporation. For giving this kind of loan the large business organizations consider the locality of the small business, the target market of the business and the growth potential of the small business.
Franchise Loans
Some franchise companies provide financial assistance to the small businesses or help them to find a lender.
Export Financing
These loans support export financing to small businesses. These loans are provided only on the guarantee of timely repayment of the loan.
The Documents needed to avail any of the above mentioned loans are:
1) The small business owner has to convince the govt. that his business will be a sincere and authentic venture. He has to serve complete details along with his business plan to the government. Govt. generally believes that if somebody invests his own money in his business then he will be much more determined to earn profits and achieve success.
2) A strong business plan clearly stating the probable profits should be submitted to the government.
3) The schedule of repayment must be clearly discussed.
4) The person applying for small business cannot have any criminal record.
Government offers special loans to worthy businesses or to the people who are unemployable. Some of these loans are:
Loans from banks
Banks provide loans to small businesses if its future growth prospect and prospective profit figures are presented clearly to the bank. Otherwise getting a small business loan from a bank may be proved to be a difficult task. It is very important to mention that there is Debt and Interest associated with a bank loan and it is essential to make a general agreement between the bank and the borrower. The several ways to ask for a bank loan are
1) Request for credit
2) Request for partnership in small business
3) Request for grants with debts
4) Request for free assistance
Loans by the Large Business Houses
Large Business houses also give loans to the small businesses but in order to get the loan the small business has to engage itself in some form of partnership with the investor that is with the large business corporation. For giving this kind of loan the large business organizations consider the locality of the small business, the target market of the business and the growth potential of the small business.
Franchise Loans
Some franchise companies provide financial assistance to the small businesses or help them to find a lender.
Export Financing
These loans support export financing to small businesses. These loans are provided only on the guarantee of timely repayment of the loan.
The Documents needed to avail any of the above mentioned loans are:
