Like most bank loans, they can be tough
to get, and the process can be frustratingly long. But the repayment
conditions of Government Loans for Small Businesses are usually very friendly.
1. Know what you have
There are government-backed business loan agencies in every country. You will need to find out if your Federal or State government has any such loan program. If none is available in your state and country, then a government loan can’t be on your list of financing options.
2. Do your homework
You will need to address all the issues that the government loan agency would look closely at before approving or denying your loan request.
3. Choose a suitable loan option
4. Obtain and fill your application
You need to obtain a loan application form and fill it carefully. If necessary, you can get help from an expert or an official of your government loan-issuing agency. The SBA offers assistance in the application process.
5. Prepare other needed documents
You will also need to prepare the supplemental forms as well as all documents you are required to attach along with your application.
Other documents usually required by government loan agencies include franchise agreement, purchase agreement, articles of incorporation, copies of licenses, letters of reference, partnership agreement, and so on.
6. Write your executive summary and cover letter
Your executive summary must summarize what your business is all about as well as your reasons for requesting the loan. Some government programs require a business profile. Your business plan will act as one.
7. Review and submit your application
After filling the application form, you need to review and proof your application. Unpardonable errors can blow your chances of getting the loan, so take your time to weed them out. After review and proofing, you can then submit your application.
In Summary:
Although getting a loan is not easy, by adopting the tips in this chapter, you will have greater chances of success. Generally, existing businesses are favored by banks, while startups are favored by government-loan agencies; but this isn’t etched in stone.
How to Apply for a Government Loan
Like other lenders, the government-backed business loan program takes significant risk on you as a small start-up business. For this reason, they want as much assurance as possible that they are not making a wrong decision by granting you a loan. So, your loan application should address their concerns as much as possible. Here are the steps you should follow when applying for a government-backed business loan:1. Know what you have
There are government-backed business loan agencies in every country. You will need to find out if your Federal or State government has any such loan program. If none is available in your state and country, then a government loan can’t be on your list of financing options.
2. Do your homework
You will need to address all the issues that the government loan agency would look closely at before approving or denying your loan request.
3. Choose a suitable loan option
4. Obtain and fill your application
You need to obtain a loan application form and fill it carefully. If necessary, you can get help from an expert or an official of your government loan-issuing agency. The SBA offers assistance in the application process.
5. Prepare other needed documents
You will also need to prepare the supplemental forms as well as all documents you are required to attach along with your application.
Other documents usually required by government loan agencies include franchise agreement, purchase agreement, articles of incorporation, copies of licenses, letters of reference, partnership agreement, and so on.
6. Write your executive summary and cover letter
Your executive summary must summarize what your business is all about as well as your reasons for requesting the loan. Some government programs require a business profile. Your business plan will act as one.
7. Review and submit your application
After filling the application form, you need to review and proof your application. Unpardonable errors can blow your chances of getting the loan, so take your time to weed them out. After review and proofing, you can then submit your application.
In Summary:
Although getting a loan is not easy, by adopting the tips in this chapter, you will have greater chances of success. Generally, existing businesses are favored by banks, while startups are favored by government-loan agencies; but this isn’t etched in stone.
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