By Evan Vitale
Sometimes, small business owners believe the deck is stacked against them when it comes to obtaining financing for their business.
A small business loan is exactly what the name implies – a “small” loan for your business. We’re not talking about a $1 million dollar loan to purchase real estate or to build a commercial building. Instead, this type of loan is typically under $150,000 and is usually considered working capital.
Working capital can mean different things to different business owners and lenders. These funds can be used for relocation, purchasing inventory, staff training, hiring, payroll, research and development, or to have extra cash on hand that’s needed to acquire new customers and help keep current customers happy.
But are banks lending money to small businesses, or are small business owners afraid to apply for loans in fear of getting turned down?
Your bank is a good place to start, but don’t give up if the answer is “no.” Before you move on to other options, ask your banker what can you do over the next year to improve your current financial situation and change a future request to a “yes” answer.
Another option to consider is a Small Business Association (also known as “SBA”) loan. While the bank who just told you “no” for a regular loan, they might be offering loans through the SBA program.
Until you try to apply for a small business loan, the answer is “no.” The best step in seeking financing opportunities is to talk to your banker.
* * *
Connect with Evan Vitale on LinkedIn.