Tips on Applying for a Business Loan

Business loans are excellent tools for individuals with brilliant business ideas but do not have enough financial resources to make these ideas come to life. Whether you’re looking at starting a new venture or expanding an existing one, they can provide you with a solid foundation to ensure its success. They come in various forms and agreements and it’s only a matter of finding the best one for you.

When you’re thinking about applying for one, it is important to consider a number of things such as the feasibility of your idea, the most appropriate loan for your venture, and your credibility as a borrower. If you’re not certain about the answers to some of these matters, you always have the option of consulting people with experiences on this field or specialists such as your accountant, lawyer, et cetera. Once you have all these things sorted out, you can proceed to the application actual process.

Here are a few things to remember if you’re considering applying for a loan:

1) The most vital part about applying is having a feasible business in mind. When you finally present your proposal to your prospect lender, the bank or financial institution will be asking you all sorts of questions regarding your idea and it is important that you have the best answers for all of them. Among these questions, your lender would be very interested to know about the success rate of your venture.

2) Next, you have to consider what type you need. Choosing the best one can depend on your personal resources or assets or to the needs of your business. Typically, you can select among short term, intermediate and long term accommodations depending on the specific needs of your business.

You also have the option of choosing between a secured and unsecured type. Secured loan entails that you have to offer collateral. Usually, this arrangement can offer you a larger amount with lower interest rates compared with an unsecured type since, obviously, lenders prefer to have the insurance that their investment will be returned.

3) When you’ve decided on the kind you’re after, consider its risks or costs. If you set a property as collateral, then you must be extra cautious since secured loans can have tighter policies compared to unsecured ones. Make sure that you read the entire agreement and that you have your lawyer to have it reviewed, and if possible turn it to your advantage.

4) It is also important to consider from the very beginning how you intend to payback your dept. Your lender will be very interested to hear about this so make sure that you come up with a credible plan. Your repayment plan will be included in your agreement so it is important that you and your lender have a common understanding and that you follow the agreed plan religiously.

5) Finally, all these considerations plus many other things are going down to your proposal. Aside from a specific description of your business venture, the amount you intend to borrow and the type of credit you’re after, your prospect lender will also want to know about your credit history and other proofs that can certify your reliability as a borrower. In presenting all these information, it is important that you communicate with your lender about your business honestly and confidently.

How To Get A Business Loan In Maine

It is not difficult to obtain a business loan in Maine. Once you know whom to approach, you can get cash for carrying forward your business. Before going any further, let’s have a look at what FAME is.

Finance Authority of Maine (FAME):
The Finance Authority of Maine (FAME) is a body that issues finances to the people of Maine for business purposes. FAME acts as a pillar of support for the aspiring entrepreneurs who want to venture out into the business world. It also assists the existing businesses in expansion.

FAME is closely associated with the banks of Maine. It provides traditional loans for all types of businesses as well as tax credits to invest in manufacturing or firms involved in exports. FAME also offers taxable and tax-free finances at reasonable rates.

Let’s have a more comprehensive look into FAME’s services.

Commercial Loans:
FAME gives up to 90 percent insurance on commercial loans not exceeding $7 million. These loans are for almost all types of businesses.

Tax Credits for Seed Capital:
Under this program, you can obtain a 30 percent tax credit for investment in a private venture up to $200,000. Certain companies have even received $1,000,000!

Loans for Computers:
If you need to install computer hardware and software for your business, you may approach FAME. They provide expedited loans for small businesses.

Loans for Regional Economic Development:
In 1994, a $10 million bond was issued under this program. FAME provides this capital for the welfare of the community. If you are a non-profit organization, or a public enterprise, you can borrow money under this program. You can qualify for funds up to $200,000.

Export Financing Services:
FAME provides insurance on working capital. This gives greater security to the lenders and thus boosts the lending activity on international basis. The Export Credit Umbrella Insurance is offered by the Exim Bank of America and is managed by FAME. This insurance mitigates the credit risk involved in international trade. Thus, it enables the exporters to provide credit terms to the international buyers in a highly competitive market.

Funds for Agricultural Development:
FAME also provides funds for agricultural enterprises. The interests are as low as 5 percent. You can qualify for loans up to $250,000 to introduce advanced technologies and enhance the production and marketing of products manufactured in Maine.

You may contact FAME for further programs, by calling 207-623-3263 or logging on to the Web site.

Has the Bank Denied Your Company a Business Loan?

The Evolution of True Business Credit

Over 95% of all small business loan applications are denied by banks!

A depressing statistic if you’re a business person looking for funding. And while there seems to be no shortage of advice for new entrepreneurs – articles like “Top Ten Strategies for Financing your Start-up,” “How the SBA can help your Small Business,” and “Enhanced Personal Credit is the key to Small Business Success” are common place – the unfortunate truth is that most authors of such articles have never created a successful new business. This conclusion is inescapable given the extensive misstatements and counterproductive advice frequently disseminated in the popular financial press.

You need help from someone who has been successful in helping real businesses get real business loans. Going to the SBA, using retirement funds, tapping out personal credit cards or seeking venture capital in exchange for a lion’s share of equity are common themes of so called “business magazines.” The unfortunate theme of all such approaches is that they are based, virtually in toto, upon your personal credit. They are not grounded upon a foundation of separate business credit that is distinct and apart from your personal credit. This key of “separateness” is the crux of true business credit.

The cornerstones to your business credit foundation are two core processes:
1. Creation of the correct business structure, and
2. Systematic processes to insure that your business is fully compliant with all of the evaluative criteria used by a) lenders and b) corporate credit rating agencies.

In addition to these mechanistic features, you need to create an emotional appeal for your business – a Business Plan that will cause a lender to believe that you, notwithstanding the odds, will actually succeed and prosper. We have extensive experience helping a wide variety of business prepare this quality and type of plan.

An often overlooked fact is the importance of an effective website in the credit assessment process; one of the first things a lender does is to look you up online. If your website looks like an incomplete or unprofessional effort, it will hurt you. Conversely, if your site Pops! – you’ve taken an important step to creating an indispensable impression – the impression that you’re for real, you have gravitas, and the bank would do well to attract and keep a client like you!

Once you have an appropriate corporate structure, proper credit acceleration processes in place, and a comprehensive plan, you need to undertake the actual work of building the separate business credit. In sum, paying bills on time and, when appropriate, pushing the envelop to expand your businesses credit. It is critical that you follow an appropriate ascending scale when expanding credit. Seek too little, and you’re not building the correct foundation. Seek too much, and you face a denial that will claw you back. We are experts at this process.

The Critical Evolutionary Stage

Critical mass is when you reach the point where you are ready to convert the credit profile we have helped you create into actual business financing. Your two options – debt financing (a loan) or equity financing (investor gives you money in exchange for equity.) Frequently, small business owners think that equity financing is easier to acquire and preferable. Actually, the opposite is true. However, there are times when equity financing has advantages. When that is true, we can help you present your case to equity financiers.

The saying that “the longest journey begins with a single step” is especially apropos to the creation of business credit. You just need to get started, on the right path, and keep at it. If you follow our protocols, you will – absolutely will – succeed. Get going today!