Banks and credit unions are the most common source of funding. These entities provide financing if you can show a sound business plan and the ability to repay the loan. To be successful in obtaining a loan, be prepared and organized. Know exactly how much money you need, why you need it, and how you intend to pay it back. Convince your lender that you are a good credit risk.
Lenders dislike risk.
Improper preparation may indicate to a lender that your loan could be high risk. Match your financing with the needs of the business. Short-term loans to finance working capital lines of credit or accounts receivable are usually paid back in less than one year. Long-term loans have maturities over one year and finance business expansions, equipment or real estate purchases. Approval of your loan request will depend on a number of variables.