|
Keys to success for SBA loans
By Jennie
L. Phipps • Bankrate.com
 You
can increase your odds for getting loan from the SBA, experts say.
Here's how:
- Choose a business you know something about.
For instance, it will be hard to persuade a banker that you're
going to run a successful restaurant if you've never worked in
one. A lender would feel much more confident, on the other hand,
turning over money for a pizza business to a teacher who had worked
weekends in the local pizzeria for two years.
- Put your own money on the table. If
you won't risk your savings, why should the bank?
- Clean up your credit record. The bank
will want to know that you pay your bills on time, have no liens
or recent bankruptcies.
- Write your own business plan. You
may be able to get some assistance from an accountant or some
other knowledgeable adviser. But if you don't do the work involved
in putting the plan together yourself, you won't be able to talk
about it in enough detail to impress a lender that you know what
you're doing.
- Understand cash flow. Realistically
analyze how much money it's going to take to open the business
and keep it afloat until you're making enough money to survive
on what you're earning. Then figure out where that cash is going
to come from -- and most of it won't be from the lender. Many
people manage by keeping their day jobs or having a spouse who
will do so.
- Analyze your family's living expenses.
High personal expenses are a burden on the new business and significantly
raise the amount of sales needed to support it. Be prepared to
tell the lender where you can cut if things are tough.
Jennie L. Phipps is a contributing
editor based in Michigan
To comment on this story, please e-mail the
Bankrate.com
editors
-- Posted: Jan. 31, 2000
|
