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Getting a Business Loan: Financing Your Main Street Business

Book Description

Every day, Main Street businesses wrestle with the challenge of finding the cash to finance growth or use as working capital. The local banker often wants a credit score of 720, three or more years in business, and a fat savings account. No wonder local bankers approve only 10% of loan applications.

Getting a Business Loan: Financing Your Main Street Business shares something your local banker might not want you to know—small business owners have options. And this book describes those alternative lending sources in detail, as well as traditional sources of funding like banks and credit unions.

Half of all business startups don't make past their fifth birthday—and often because they can't find the financing required to sustain their operations. Whether you own a small restaurant, a bicycle shop, a hardware store, a small manufacturing company, or a service business, Getting a Business Loan offers easy-to-understand descriptions of loan options that can keep you going, as well as practical advice on where to look for money and how to apply.

What would you do with an extra $40,000? Expand your restaurant? Hire a new employee to fulfill a new contract? Buy a needed piece of equipment? Getting a Business Loan will:

  • Detail how bankers look at you and your loan application

  • Explain the menu of non-bank financing options available to business owners, like asset-based lending, factoring, merchant cash advance, local "hard money," and more

  • Show how to locate potential lenders via the Internet and other means

  • Show how to prepare before you visit the lender or fill out an application

Main Street businesses aren't limited by the local bank's footprint any more. There are people and institutions all across the country that lend money to small business owners. If you want to find the money you need to strengthen and expand your business, Getting a Business Loan will show you how.

What you'll learn

  • How to speak to your banker about a loan

  • The different types of loans available at your local bank or credit union

  • How to qualify for an SBA loan

  • Alternative financing options, where to find them, and how to apply

  • Using the Internet to find money for your business

  • What to do if you don't qualify

  • Options for business owners in dire straits

Who this book is for

Getting a Business Loan is for the 7 million+ Main Street business owners with fewer than 100 employees, the backbone of the American economy.

Table of Contents

  1. Title Page
  2. Apress Business: The Unbiased Source of Business Information
  3. Dedication
  4. Contents
  5. Preface
  6. About the Author
  7. Acknowledgments
  8. Introduction
  9. CHAPTER 1: Funding the American Dream
    1. What Is a Small Business?
    2. Why Does Main Street Matter?
    3. What Would You Do with an Extra $40,000?
    4. There Are Other Financing Options
    5. Amazon.com and Small Business Financing
    6. Small Business Isn’t for the Faint Hearted
    7. Plan of the Book
  10. CHAPTER 2: Building a Relationship with the Bank
    1. Getting to Know Your Banker
    2. It’s All About Relationships
    3. 10 Questions to Ask Your Potential Banker
    4. Which Local Bank Is Courting Small Businesses?
    5. Never Forget: Banking Is a Business
    6. Summary
  11. CHAPTER 3: Keeping Your Relationship Personal
    1. Five Ways to Maintain a Great Relationship with Your Banker
    2. You Better Shop Around
    3. Good Relationships Start with Good Choices
    4. Apples and Oranges in Banking
    5. In a Relationship, Does Size Matter?
    6. Do You Need to Redefine the Relationship?
    7. Your Best Interests at Heart
    8. Keeping the Honeymoon Alive
    9. Improve Your Odds of Success
    10. Summary
  12. CHAPTER 4: Getting the Right Bank Loan
    1. Term Loans
    2. It’s Usually Buried in the Small Print
    3. A Line of Credit
    4. When Is the Timing Just Right?
    5. One More Thing
    6. Summary
  13. CHAPTER 5: Navigating the Maze of the SBA
    1. Guaranteed Loan Programs
    2. Other Programs Offered by the SBA
    3. Starting and Expanding Businesses
    4. Improving the Odds of SBA Loan Success
    5. SBA Loan Application Checklist
    6. Summary
  14. CHAPTER 6: Angels and Venture Capital
    1. What Is a Venture Capital Firm?
    2. The Pitfalls of VC Funding
    3. Benefits of VC Funding
    4. Before You Pitch Your Business to a VC
    5. Pitching Your Business to a Venture Firm
    6. The Angel Down the Street: When Local Investors Come to the Rescue
    7. Summary
  15. CHAPTER 7: The Sun Will Come Out Tomorrow
    1. Preparing Your Loan Package
    2. Why Alternative Lenders Might Be Better for You
    3. Just What Is an Alternative Lender?
    4. Regrouping and Rethinking Your Desire for a Loan
    5. Summary
  16. CHAPTER 8: Asset-Based Lending
    1. What Qualifies for an Equipment Loan?
    2. How the SBA Approaches Equipment Loans
    3. Other Types of Asset-Based Lending
    4. “Personal Asset” Lenders: Keep Your Eyes Wide Open
    5. Is an Equipment Loan a Good Option for You?
    6. Finding a Lender
    7. Standard Equipment Loan Terms
    8. Summary
  17. CHAPTER 9: Factoring
    1. Is Factoring a Good Choice for Your Situation?
    2. The Nuts and Bolts of Factoring
    3. Summary
  18. CHAPTER 10: Commercial Real Estate Loans
    1. Start with the CDC/504
    2. The Three Cs of Commercial Real Estate Lending
    3. Important Questions to Ask Before You Sign on the Dotted Line
    4. Is a Commercial Real Estate Loan a Good Idea for Your Small Business?
    5. Where Should You Look for a Loan?
    6. Standard Terms for Commercial Real Estate Loans
    7. Summary
  19. CHAPTER 11: The Merchant Cash Advance
    1. Where Did MCAs Come From?
    2. Qualifying for a Merchant Cash Advance
    3. What Types of Businesses Are Good Matches for a Merchant Cash Advance?
    4. How Do You Determine Which MCA Lender Is Right for You?
    5. Where Should You Look for a Merchant Cash Advance?
    6. Standard Terms for a Merchant Cash Advance
    7. Summary
  20. CHAPTER 12: They Call It a Credit Card for a Reason
    1. Why Would You Want a Business Credit Card?
    2. Personal Credit Cards and Business Credit Cards Are Not the Same
    3. How to Avoid Credit Card Surprises
    4. Walking the Razor’s Edge
    5. Finding the Right Business Credit Card
    6. Summary
  21. CHAPTER 13: Peer-to-Peer Loans
    1. Peer-to-Peer Lending vs. Traditional Lending
    2. The History of Peer-to-Peer Lending
    3. Imperfect Credit?
    4. Successfully Finding Peer-to-Peer Funding
    5. A Borrower’s Success Story
    6. Borrowing from Mom and Dad or Your Rich Uncle Fred
    7. Summary
  22. CHAPTER 14: Business Acquisition Loans
    1. Do You Have Any Experience?
    2. What Kind of Business Are You Looking For?
    3. What Is Your Risk Tolerance?
    4. The First 20 to 50 Percent Is On You
    5. Is the Seller Willing to Finance?
    6. The SBA 7(a) Loan Program
    7. Banks and Other Financial Institutions
    8. Before You Visit the Lender
    9. Pie in the Sky or the American Dream?
    10. It’s Part of Being a Small Business Owner
    11. Where Should You Look for a Business Acquisition Loan?
    12. Summary
  23. CHAPTER 15: Franchises
    1. The SBA Approved List
    2. The SBA’s Advice for Picking a Good Franchise
    3. Financing Options Outside of the SBA
    4. Avoid These Franchise Funding Mistakes
    5. Where Should You Look for a Loan to Purchase a Franchise?
    6. Summary
  24. CHAPTER 16: Startup Funding
    1. The Cold, Hard Facts
    2. One Way or Another, You Need to Have a Little to Make a Little More
    3. It’s a Lot Like the NBA
    4. What’s Your Personal Credit Score?
    5. Passion for Your Idea Just Isn’t Enough
    6. When You Need More Money to Start than You Have Personal Credit
    7. Other Sources of Funding
    8. Avoiding the Startup Funding Pitfalls
    9. Summary
  25. CHAPTER 17: Crisis Borrowing
    1. Slow and Steady Wins the Race
    2. Responding to a Small Business Financial Crisis
    3. Disaster Loans
    4. Other Disaster Financing Options
    5. Have You Considered Throwing in the Towel?
    6. Summary
  26. CHAPTER 18: WOSB and Other Loans
    1. What Is a Woman-Owned Business?
    2. SBA Guaranteed Financing for Women-Owned Businesses
    3. Other Resources for Woman-Owned Businesses
    4. Minority-Owned Businesses
    5. Alternative Funding for Women-Owned and Minority-Owned Businesses
    6. Summary
  27. CHAPTER 19: Small Business
    1. What’s a Small Business?
    2. Unfortunately, It Isn’t Happening
    3. We Need to Stop Blaming the Recession—It Was Only Part of the Problem
    4. There Is Hope, One Lender at a Time
    5. It’s Really Sad When Even Small Business Advocates Don’t Get It
    6. There Are No Easy Answers
  28. Index