Finance Loan

How To Get Loan Financing

Published at 03/03/2012 19:45:34


When requesting for a loan, the first thing you will be asked by the lender is what you want to use the loan for. This is a question you also must ask yourself before going to your lender for a loan financing. What am I using the money for? Is it for the expansion of my business, or for daily necessities of the business? You need to provide a genuine reason why you need the money. When your lender is satisfy with your reasons and how you will use the loan, then he is one step closer to the decision making procedure.


Step 1

It is advisable for any individual before getting a loan financing to know how business loans can be used and what kind of business the loan will be used for. After which, you need to search for a loan that covers your business and that can be refund easily. There are some specific requirements you need to meet before getting a finance loan, most especially banks. There are specific requirements that must be met by appraisal if you are getting a loan financing from a bank. There are various reasons one need to get a finance loan;

To buy a propertyFor equipments e.g. machines, fixture, sImprove of business, To start up a business

Sincerely, there are different types of loan financing. It all depends on what criteria the lender will consider before he can decide if really you are qualify for the loan or not. These are some few reasons:



Step 2

MATURITY: This is one of the strongest reason that will determine a loan financing by a lender. The lender will take into consideration the maturity of the loan financing transaction. Maturity of the loan means how long you want to take the loan for. A good and sincere average is five years. In a case you want a huge or large amount of money and willing to repay quicker, you will need to show some verification that you have enough spare cash after all expenses have been taken out, to repay your loan. On the other hand, if you choose to go for a longer period than five years, the lender will want to get the nature of your business and if the business will stand after that period. For a medium size company that has been in existence for more than two to three years, this might stand as risk for you not to get the loan finance for such a long period because there is no enough evidence or proof to back it up.

Step 3

AMOUNT OF THE LOAN: You must have a reasonable amount in mind before going to your lender. Make sure the amount looks reasonable when compared to your capital and the size of your balance sheet. It will be very ridiculous to request for 20,000 if your capital is 2000. What difference does this insinuate? There is a huge difference because you lender will not finance a loan that you cannot pay back. Your lender will only lend you to the extent he believes you can pay back the money easily. So, be mindful of the amount you are requesting for loan financing. Start small and then you can increase gradually when you have proven to be a very good creditor.

Step 4

These are some of the major needs of a business loan, and there are various ways you can get a loan financing for whatever you want to use it for. Let me quickly show you some ways on how and where to get loan finance. There are different sources one can get loan from. But, there are criteria for investments and loans which they participate. Which are:

Investment banking, Commercial financing, Start up financing and Venture capital

Step 5

Some of the reasons private money business loan financing is always approved is that; they are less than perfect credit, bankruptcy, construction and real estate. It is always advisable also to get a loan financing through the right and appropriate media


Now that you have an in depth knowledge of how to get a finance loan and what he requirements are with the lending guidelines any lender will base their decision on. Therefore, you need to double your success rate in have a finance loan, be it whatever business finance solution you are requesting for.

One way to get a loan financing is through the small business administration, although it mostly guarantees loans made by private and public funding institutions. Another sure way to get a finance loan is from family and friends. I can tell you that this is the most secure and easiest way of getting a finance loan. All you need to is write your ideas out in form of a business plan and present it someone you know that believes in your dream. Otherwise, your idea will be stolen, instead of getting a loan financing.

Sources and Citations

You must be able to show some evidence that you are a good credit risk.

You can also get a loan financing by walking up to your bank to see you account officer. With the help of your account officer, your financial institution should be able to grant you a loan financing if all requirement are met. There are certain requirements you need to fulfill if you are planning to get a loan financing from your financial institution. You must provide a good financial statement that states that you have a very good profit margin and your business should have been in existence at least five years. The most important thing also is that you should request for a reasonable amount of money. Your financial institution will only lend you money you will be able to refund. I will advice that when getting a loan financing, it must be a private business loan financing.

There are different types of private business loan financing; which includes:

Venture capital firmsPrivate investorsSmall business investment companiesCommercial Lenders


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