.Especially with the tough economic climate, getting a bank loan to finance your business has become even more difficult. Banks cite risk factors and increasing costs of servicing small accounts as the primary reasons for minimizing their exposure to small businesses. Still, it can be done.
According to Dun and Bradstreet, below are five basic factors that all lenders look at before they will agree to loan you money for your business:
- The condition of your personal and business credit
- Business loan applicants should have a reasonable amount of equity invested in their businesses.
- Proof of adequate working capital, which is your cash on hand.
- Ability to repay the loan, either from your business cash flow or a secondary source such as collateral.
- Character and experience in the type of business you plan to run.