Question: How does a new venture go about securing a business loan?

Answer: While it is difficult to get a startup business loan without a proven track record, it’s not impossible. Read on for five tips how to improve your odds for getting a loan for a new venture.

Seek help before you start shopping – Local small business resources like SCORE Naples and the SBA’s Small Business Development Center can be invaluable when you are ready to seek funding for your small business. Not only do they know the ins and outs of approaching lenders, they can steer you to the SBA small business friendly banks in your area.

Know what lenders are looking for – You’ve got to be prepared with the information your lender requires to a make a decision in your favor. Lenders typically evaluate four key factors: previous business experience, ability to repay the loan, collateral, and personal guarantees. Necessary documents include a written business plan, 12 to 24 month income and expense projections, personal financial statements, and at least two years tax returns. Also, how much money you require, how it will be used, and repaid.

Give the lender your business – Move all your personal and business accounts to their bank so they can evaluate how you manage your money. This will give you a chance to check out the bank’s loan policies and gather up the information they require. It sends a good signal when you come prepared.

Bankers are people too – Get to know your bank’s staff including the tellers and loan officers. Developing a personal relationship with them is essential. Taking the time to know your banker and them to know you as a responsible person is as important as the documents you provide when requesting a business loan.

When at first you don’t succeed – Many entrepreneurs get turned down for funding, some more than once before they succeed. Don’s give up, meet again with your SCORE business counselor to discuss your strategy and the reasons given for the declination.

One option to consider if you do not have the necessary collateral is an SBA loan guarantee. The US Small Business Administration has a variety of guaranteed loan programs. These are guarantees SBA gives your bank in case of a loan default. There is a charge for the guaranty, in addition to the interest required by your bank.

The Naples Chapter of SCORE is offering a free online workshop titled “How & why to buy an existing business” on July 23^rd at 12:00 PM. In addition to securing financing, the event will also touch on how to do the due diligence, evaluating the business financials, and negotiating the deal. To register log on to https://www.score.org/naples/event/how-and-why-buy-existing-business

Gray Poehler is a volunteer with the Naples Chapter of SCORE, Counselors to America’s Small Business. To ask a question or request free and confidential business counseling, call 239-430-0081 or log on to https://www.score.org/naples/local-mentors