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How to get a Business Loan from a Bank

by GuestPoster on January 22, 2012

My name is Christian, I am from Louisville, KY and I would like to give some tips about how I acquired a business loan to get my HDR Photography career going. Since I am a new venture, getting a business loan wasn’t the easiest thing to do. The following is what I kept in mind and what I did to secure my business loan and hopefully if you keep these tips in mind, you will improve your chances of getting your loan.

Banks are in the lending business to make loans. If it wasn’t for lending, banks wouldn’t be in business so they have to lend money. They would like to give you your loan, they just have to calculate the risk whether a business is healthy enough, or have the borrower sign a personal guarantee. In the case of a personal guarantee, the borrower would have their credit reports pulled to see if they’re responsible enough to repay loan should the business fail.

Before you approach the bank, make sure that you have all the documents required to show your ability to repay the loan. You’re going to need to bring along your financial statements showing the health of your company and also provide your best guesstimate on what your future income should look like, if they were to approval the loan for the next couple of years.

You’re going to need to play Sherlock Holmes here and anticipate their every question. The most common questions they will ask are: What are you going to use the money for. In my case, it was to purchase a Nikon Camera, tripod, and several expensive camera lenses. How are you going to repay it? I told the loan originator that I was going to sell my prints. How long are you going to need the loan for? I told him that my best estimate was that I would be able to pay back the $5,000 loan safely within a year. He also asked me what would happen if I was denied for the business loan. I expressed to him that I would have to get an extra job, save money, but I also expressed that I had marketed many items on the internet before and I was confident that the images that I created would sell.

Present yourself in a positive manner. Make sure you are wearing your Sunday’s best so to speak. They want to see people that dress for success – it eases their mind. The last thing that they’re going to want to see is someone that just doesn’t look well put together.

Don’t over exaggerate the success of your business. Everything that would help them make their decision is going to be in black and white. Telling them something that would be easily picked apart would be construed as dishonest and impact their decision in an negative manner.

If your loan does get denied, it’s not the end of the world. There is a world full of lenders out there and keep your head up. Don’t ever give up! Plus there are other organizations on the internet where they would love to loan you money –  Kiva.org is a good example. Well, I am off to start my HDR photography career.. wish me luck!

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Unsecured Personal Loans For People With Bad Credit

by Scott on January 14, 2012

If you have perfect credit and a job, getting a an unsecured loan should be no problem. You can practically drive down the street and walk into the first bank you see and take a loan to meet your needs. Your credit shows how much you owe other institutions and how dependable you are in paying your bills back on time. I would like to share a story with you about my younger years explaining to you how I got myself into some credit trouble and what my options were:

A Personal Story

Ever notice when you’re checking out at a department store and they (9 times out of 10) ask you to apply for their credit card for immediate savings? Well, when I was 18 and unknowing exactly what credit was, I applied for the card and saved 20% on my new Tommy Hilfiger sweatshirt.

The high school I was attending didn’t teach me anything about credit and my family was miserable with money. Always wanting the new gadget or gizmo and never purchasing the item outright, but instead my parents would put the item on credit.  This set a very bad example for me at an early age, so I took that Macy’s credit card and maxed it out within the following month so fast it would make your head spin.  Now for not having any credit and only being given $100 line, it wouldn’t appear to be all that detrimental, however, the problem wasn’t with how much I owed, it was paying the bill on time. I was irresponsible, I would place the bill to the side thinking that I’ll pay it another day, the due date would come and go and I tore my credit to shreds.  So that is how I started out my life in the financial world and it was an uphill battle for a long time

Now not coming from a family where money was no issue, there were some things that I was going to have to pay for. My 1989 Mustang GT sure had a lot of “get up and go,” but also would blow a gazette on numerous occasions.  Now only having the income of whatever the ice-cream parlor would give me, there were times that I would have to come up with a substantial amount of money that I simply did not have – I had to take out a loan.

I approached my local back where my mother had opened a checking out for me a couple years earlier about taking a loan out for my much needed car repair. I filled out an application and they checked my credit.. I was called back up to the banker’s desk and was given the bad news, “Sir, we are not able to approve your loan at this time.” I asked, “why would there be a problem?” “Sir, your credit score is a 480 and it doesn’t appear that you have ever paid a bill back on time.” I told her that I did pay back everything I have ever owed anyone and then she went on to say that they only way that she could approve my request for a lone is for someone to co-sign for me.

The moral of the story is that it’s practically impossible to obtain unsecured personal loans for people with bad credit. If you’re stuck in this predicament, there are three things that you can do:

  • Borrow the funds from friends or family
  • Have someone co-sign for the loan (they will be responsible for the payment if you don’t make it)
  • Get a Paycheck advance

What did I end up choosing to do? I didn’t have friends or family to borrow or would entrust me to make the payments on time, so I got a paycheck advance and it was expensive! You only want to go this route with this is your only option. These loans can be known as predatory and you always want to shop around, compare rates and fees.

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