Small Business Bank Loans

Just make sure your pitch is better than it has ever been—and that it fits the requirements of the banker you are talking to. (Ask about their loan criteria before you present your project).

But, if you are looking for even a small amount of startup money, a small business bank loan is probably not in the cards for you right now.

If you need investor money, or venture capital, obviously, you will not get that from your bank…although a good banker should be able to introduce you to an Angel Investor or Venture Capitalist.

Also, much depends on the amount of money you are looking for. You and your banker may be able to find ways to make a bank loan of $10 to $20 thousand, but when you start looking for more, your chances for small business bank loans quickly diminishes.

The fact is, bank loans are just not readily available for small businesses right now%mdash;but your banker should still be able to help you.

How to Proceed with Your Search

Having said that however, if you believe you may qualify for any of the SBA loan programs, you will also need to apply through your local bank, or some financial institution, in order to acquire an SBA guarantee. If you have a good relationship with your local banker, this is always a good place to start, because even if the bank cannot make the loan themselves, they usually can give you some good advice and may even steer you to places that may be interested in financing your project.

So, here is the approach I am recommending today, regarding small business bank loans:

1. Start with the bank where you have been doing business the longest. If you have developed a business relationship with a particular banker, so much the better.


2. Make sure your personal credit is in good shape and your credit score is high.


3. Be absolutely clear on your need and purpose for the money you are asking for. Your Small Business Plan needs to be in tip-top shape, and your pitch razor sharp.


4. Look and act like you are a good loan candidate.


5. If the bank turns you down, be sure to ask for your banker’s help in finding alternative contacts for your project.


6. Don’t think there is anything wrong with either you or your business project just because the bank turned you down.


7. Make your pitch to all the banks in your area, because each bank tends to specialize in certain areas of lending, and where one bank may not have an interest in your project, one of the next ones you talk to may. Keep trying, and approach each bank as though they were the first. And don’t forget to ask each banker for advice on where you might go to secure financing for your project.

• You need to have a strong banking relationship as your business grows.


• Your banker can assist you in obtaining an SBA guaranteed loan, if this is something that fits your business project.


• Bankers can often introduce you to Angel Investors and Venture Capitalists, if this form of investment better suits your needs.


• If you are going to do an “owner financing business” method, your banker can often help you.

For more information on SBA loans, read the SBA Business Loan report.