Let’s explore the 5 key factors which shape the entire loan approval process.

Key Factor #1:Do you have a sound business plan?

In addition to the loan application paperwork, a commercial lender will need to see your small business plan.You must prove that your business is viable on paper and demonstrate exactly how and when your new business will turn a profit.No reputable lender will hand over a loan check without first ensuring that your new business will have the ability to pay back the borrowed funds.

Key Factor #2:Do you have good personal credit?

Even with the best possible small business plan, it is highly unlikely that you will be approved for a start up business loan without a reasonable credit history.A lender determines the lending risk by evaluating your personal credit worthiness.Please understand and consider that you are entering into a legally binding agreement in which you promise to make timely, scheduled repayments.Your past credit history is the only evidence available to a potential lender, indicating how you have repaid other debtors in the past.

Key Factor #3:What collateral do you have to secure the loan?

Notice I didn’t write “do you have collateral”.You absolutely must have collateral to be approved for a standard commercial loan.This also includes SBA guaranteed loans.Please believe me when I tell you that the US Small Business Administration is not in the business of guaranteeing “high risk” commercial loans.A commonly used source of collateral for a start up business loan is the equity in your home, or other real estate you may own.Therefore, the start up loan is secured on this real estate.If you fail to repay the loan, your property may be at risk.

Key factor #4:What are you planning to use the money for?

In addition to demonstrating that you have need of a loan (in other words, you do not have other means of obtaining the funds to start a business), you must also indicate to a lender what you will be spending the money on.The lender must approve of how you intend to spend the loan.If you wanted to spend your start up business loan on research and development, the lender must approve.No matter for what or how you intended to spend the loan amount, it must be approved by the lender. This is usually spelled out in your small business plan.

Key Factor #5:What if you decide to repay the loan early?

Did you know that you can be hit with prepayment penalties of as much as 5% for paying off your loan early?This even applies to SBA guaranteed loans.Keep in mind, lenders are in business to make money.They only make money on interest repayments, not the principal loan amount.If you pay your loan off too early, they will lose out on potential profits!

Some Potential Problems…

What is you have poor credit or don’t own a home?Are you still able to secure a start up business loan?The answer is likely no.You can however check out alternative lending sources, such as peer-to-peer lending groups like Prosper or Loanio.

What is the Solution?

The solution is to find a sound alternative to taking out a BIG bank loan in the first place.Consider bootstrapping your new business.As a Start Up Business Consultant, I help budding entrepreneurs find low cost alternatives to loan financing.Clients who have purchased my eBook have found the money they need for small business success.You can find absolutely free sources of business start up funding to make your dream of small business ownership a start up success story — even if you have bad credit or don’t own a home!

2009 Kimberly Kelly – All Rights reserved

This article may only be reprinted in its entirety, including author byline, bio and with all live links in tact.

Author: Kimberly Kelly
Article Source: EzineArticles.com
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Small Business Administration:

The SBA does not directly offer grants to individuals for business expansion or start-up. For individual set-ups, it provides a wide variety of loan programs on easy pay back terms. However, the SBA does offer many types of grants programs indirectly to benefit small business entrepreneurs. SBA grants programs are specifically designed to expand and enhance those organizations that provide small businesses with technical or financial assistance. These monetary grants generally support state and local governments, non-profit organizations and intermediary lending institutions.

Small businesses can in turn avail the grants from these institutions. The entrepreneurs need to have a workable business plan and meet the required basic criteria to avail the loan or grant from SBA supported institutions. These funds can be then utilized to either set-up or expand the existing businesses. SBA has very special and easy terms to offer business grants to women entrepreneurs and members of the ethnic minority groups to help them become economically independent. This leads to numerous co-related activities and finally development of underdeveloped regions of the vast country. It brings about a social change and societal uplift.

Benefits of Grants from SBA:

A grant is a direct financial contribution made without any expectation of a repayment but with very specific expectations of the required outcome. These programs are designed to encourage and assist entrepreneurs in starting their own ventures. This promotes an economic development and integrates the individuals into the mainstream of American economic society. Organizations that give grants exclude for-profit businesses, but encourage small businesses to take their grants. The grants are readily provided after meeting certain basic criteria.

Women entrepreneurs are the largest beneficiarys of governments generosity for special encouragement. Federal grants are extended to those non-profit organizations that provide counseling, training and other technical support to women groups. The SBA runs special help centers and womens business centers to train the women technically. They give access to credit and capital, provide with government contracts etc as well.

Ethnic minority groups too are special beneficiaries of federal governments financial grants on easy terms. SBA runs a Minority Enterprise Development Program known as the 8(a) program. This helps the minority entrepreneurs to bag the government contracts for the utilization of their products.

Small business people or groups are very hard working and enthusiastic about their business. They spend quality time to develop it and stay in touch with their work, as they do not have too many people to help. Their businesses take precedence over their family, friends or even vacation plans. They stay in constant touch to avoid failure or any unprecedented disaster. This helps in successful maturation of their businesses after an initial set-up time.

Author: Alexander Gordon
Article Source: EzineArticles.com
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We are living in the times when governments understand the value of small businesses for the global economy. Small businesses are the pushers and testing grounds for new trends, they provide lots of jobs for the masses, they make any society more stable and happy. So governments have created special funds, programs, associations to provide government grants for small business.

You can be surprised to find out that there are so many types of grants that you can be missing and that can help you out almost instantly – minority small business grants, small business grants for woman, federal grants for small business, business start up grants and even free small business grants. All these types of grants act as a real proof that they really help many small businesses to succeed.

There are two typical issues about getting small business grants.

(1) WHERE to Get Small Business Grants.

Start with doing local search for ‘small business grants’, ‘small business bank loans’, ‘venture funds’ and ‘angel investors’. This will give you a pretty big list of places to apply for help.

If you are in the USA – there are some majors that provide this type of financial assistance – for example, Small Business Administration (SBA) that has many departments that fit all possible types of businesses or help. It can also be wise to check the catalogue of Federal Domestic Assistance – there you can find many good places to apply for the grants.

For businesses outside US there is also a way to succeed. Government, public or private organizations in your country must be giving some help to new small businesses within the framework of these institutions:

- economic development programs, funds, departments, opportunities, initiatives;
- banks (usually they have special small business loans and programs);
- venture funds, companies, firms;
- credit partnerships;
- angel investors (this type of business got very popular recently).

The list is big, but it means that you do not need to trust one business grant opportunity. The more opportunities, the better for you!

(2) HOW to Get Small Business Grants.

There is no magic formula to safe getting of grants.

But you can increase your chances using these simple tips.

Build a good business plan. Surely you are starting your business with some plan, but here you need to be very convincing, well-prepared to any questions. People who read this plan must understand and feel that the only element necessary for your success is the money, the grant.

Keep in good contact with your grant agent (manager, officer, anyone who is in charge of all details). Don’t be a pusher, but make sure that you are in control of the situation. A lot will depend upon this person, maybe not the final decision, but a lot. Make sure he/she can reach you at any moment. And would be great if you have his/her contact details, the more, the better.

Try to find someone who already got a grant from the institution or organization you apply to. If it is possible, find out all details before applying there: what problems this person had, what questions asked, what impressed the grant givers, etc.

And the last advice, if in one place it did not work, don’t give up. You can either appeal or try another place.

Only those who knock at the door can see it open.

Author: Nickolay Bokhonok
Article Source: EzineArticles.com

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Bad credit need not always be a hurdle for achieving one’s dreams. You can obtain a business loan even when you have a bad credit score. There are several independent finance agencies offering business loans to customers with bad credit. You need to just explore different possibilities for obtaining a business loan with bad credit.

Banks issue business loans only on the basis of personal credit scores of the applicant. Hence, banks are not an appropriate funding source to approach in situations where the applicant has a bad credit record. Other alternatives include approaching community lenders, private lenders specializing in bad credit business loans, using home equity as collateral for obtaining a business loan, considering friends and relatives as investors, and SBA.

Community lenders and local banks consider business credit scores while approving a business loan. You can obtain a business loan at a lower interest if the business credit scores are outstanding.

Lenders specializing in bad credit business loans provide funds at a higher interest rate. These agencies require property or equipment in the form of collateral. This form of business loan is called as secured business loan.

Utilizing home equity value as an investment is also a useful option. You can obtain large amounts of money at lower interest rate through home equity loans. However, this option is risky because if the business goes into a loss, you may get into the danger of losing ownership of not just your home but also the business.

Another interesting option is to include friends and relatives in business matters. They can be included into the management as investors provided they offer financial assistance to run the business. However, there are certain disadvantages involved in including family members, relatives and friends.

One can even obtain a business loan through Small Business Administration or SBA. SBA acts as a guarantor, thus providing the lender with necessary assurance against any possible money loss.

About Author:

Pauline Go is a professional writer for many website like newbiemommy.com. She also writes other great articles like Settlements For Victims Of Predatory Lending, Guaranteed Personal Loans With Bad Credit Tips, How to Get Best Free Refinance Car Loan

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If you are a small business owner that has toyed with the idea of a SBA loan, is there anything beneficial in the new economic recovery act (“The American Recovery and Reinvestment Act of 2009″) that will help me? It may surprise you to learn there is. No, I am not a paid spokesman for the U.S. government. Let me go one step further. What if there was a program paid by taxpayer dollars that actually reduced your cost of doing business in procuring a loan? You would probably think it was another chimerical attempt by Congress to bluff the American public. But it’s actually true.

Here is how it works. When you get a SBA loan from your local banker (come on now–it is possible in this economy), you have to pay at closing what is called a “SBA guarantee fee”. These fees are dutifully collected and sent off to Washington to create a war chest. If you have the misfortune of defaulting on your loan, the lender can tender this default to the U.S. government and receive between 50% and 85% (possibly 90% under new laws) of the loss as reimbursement. In fact, that is one the purposes of the SBA: to cover defaults through the SBA guarantee loan program. But as the applicant, you have always had to pay this out of pocket. And it wasn’t cheap. For a loan up to $150,000, the fee was 2% of 50% of the loan value (the 50% in this example is the guarantee amount). It was 3% for loans above that amount. For example, with a $150,000 loan, you would be paying approximately $1,500 ($150,000 X .02 X .50) just for the guarantee fee, in addition to additional costs such as the processing fee, appraisal, etc. This is money that would ordinarily have gone into your pockets for business use. For the hearty among us who like to read the actual provisions of the statute, here you go (15 U.S.C. 636(a)):

(18) Guarantee fees.-
(A) In general.- With respect to each loan guaranteed under this subsection (other than a loan that is repayable in 1 year or less), the Administration shall collect a guarantee fee, which shall be payable by the participating lender, and may be charged to the borrower, as follows:

(i) A guarantee fee not to exceed 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.

(ii) A guarantee fee not to exceed 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.

(iii) A guarantee fee not to exceed 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000.

(iv) In addition to the fee under clause (iii), a guarantee fee equal to 0.25 percent of any portion of the deferred participation share that is more than $1,000,000.

Cries have been coming from borrowers for years as to these fees. Senator Kerry and Snow have been listening. They have long proposed reducing or doing away entirely with those fees. So how does it work? Simply as a subsidy. Instead of the borrower paying it, taxpayer dollars are used for that war chest. In other words, Federal funds are used to guarantee a Federal program-that’s right.

Now the good news. Section 501 of the new stimulus Act does away completely with borrower paid SBA guarantee fees. For example, there are no longer such fees through September 30, 2010 for the 7(a) program, the classic SBA everyday “work horse” loans that are usually in the hundreds of thousands of dollars. This is what the new act says:

Sec. 501. Economic Stimulus for Small Business Concerns. (a) Temporary Fee Elimination for the 7(a) Loan Program- Until September 30, 2010, and to the extent that the cost of such elimination of fees is offset by appropriations, with respect to each loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) for which the application is approved on or after the date of enactment of this Act, the Administrator shall-

(1) in lieu of the fee otherwise applicable under section 7(a)(23)(A) of the Small Business Act (15 U.S.C. 636(a)(23)(A)), collect no fee; and

(2) in lieu of the fee otherwise applicable under section 7(a)(18)(A) of the Small Business Act (15 U.S.C. 636(a)(18)(A)), collect no fee.

But it also applies to the smaller loans. For example, SBA Community Express Loans which are between $5,000 and $25,000 unsecured. They are a pilot program which is subsumed under the same subsection of the Small Business Act. They require very little paperwork and usually receive a tentative answer within two days. There is no prepayment penalty, no requirement for business plans or financials, and are at a 7 year low of 7 ¾% interest which equates to $60 per $5,000 borrowed. Although not nearly as much, the reduction in the guarantee fees for these loans does add up. For example, the fee for a $15,000 loan is $255.00.

But does this have the effect of making banks open up their coffers and loan more money? Does the fact that the fees are lower make it easier to get a loan? Experts are divided on this subject but in my humble opinion, it will have little effect. Sure it is beneficial to the borrowers, but it is not going to provide any incentive to a lender. Remember, lenders don’t make any money either way on this: they simply collected from you, bundle it up, and send it off to D.C. They are more interested in selling for a profit on the secondary market and getting their loan processing fees, which have not been eliminated. So it is basically a wash. In another article I will give my opinion as to what will really help to inspire banks to wake up in the morning and do the right thing by loaning money.

So we’re back to where we were before: banks are still holding back and the stimulus does little to specifically change that fact. Sure, it is anticipated that further monies will bail out the financial institutions (this time with very strict accountability and transparency rules, especially as to executive compensation, bonuses, and golden parachutes-under the Recovery Accountability and Transparency Board), but what they really need is a new secondary market or stimulus to our existing one. Since banks almost always sell their loans on the secondary market, unless it flows in that direction, they are not going to make loans, regardless of fees collected.

So the meantime, I can at least tell my borrowers their fees will be lower. Every little bit helps in this quirky economic environment for small businesses.

Sue Malone 442 Diablo Road, Suite 137
Danville, CA 94526
Email: info@StrategiesForSmallBusiness.com

Sue Malone is a small business advocate and founder of Strategies For Small Business, a company devoted to providing SBA Loans for small business owners, whether as start-ups or for the expansion needs of existing businesses. For six years she has been the nations #1 provider of SBA Community Express Loans, having funded over 25,000 businesses in all 50 states. For a free loan consultation or for more information on the programs , visit our website at: http://www.StrategiesForSmallBusiness.com Or call (925) 899-8449

©2008 Strategies For Small Business. All rights reserved

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If you have come up with a new idea or just want to finally start that business of your own, finding the capital you need to get started may be the thing getting in your way. It is no secret that many new business ventures fail because of insufficient starting capital. Well, you will be pleased to know that there is help available for startup businesses. In order to support the development of new business, the government and various organizations offer grants to new or expanding businesses. While this may sound very generous, it only makes sense since it is in the best interest of the country, and other businesses as well, to encourage new enterprises by investing new venture capital; thus giving life to the dreams of entrepreneurs and continuing to promote advancement in business and technology.

Finding the right grant for your new business is an important first step and may be the only way to get your business operational. You will be surprised once you start down his road that it is not as painful as you may have imagined. There many resources along the way to guide you through the process.

When figuring out your starting costs and the type financial assistance you will require, you need to consider many different factors. Grants are specialized and your specific needs dictate the place you should look. Location, future plans, and total dollars needed are all factors in deciding which type of funding you will need and which source is the best bet for your business. There are many Small Business Start Up Grants available at the local level, the state level, and the federal level. There are also grants provided by industry and large corporations. Doing thorough needs assessment will help you determine where to start looking.

You not only need to know where to apply for a grant for your new business, but you also need to learn how to apply for the grant once you find a source. There are online sites that give free information to those looking for grants for a startup business. Many of these sites take will take you through the entire process, including required research, business types, business plans, startup costs, business licensing, taxes, and funding.

For any grant to be considered an application must be filled out and written requests and descriptions must be provided. You will need to put in writing your business proposal, a summary of your business, grant justification, a project description, a yearly budget, your qualifications, and any outsourcing that may be done.

There are places that you can visit on the Web that will educate you in the process of applying for a grant. There are also sites that will teach you how to write a grant application step by step.

The Business Grant Steps Management is one such place. They can assist you in learning how to spend your time, writing business proposals, assessing your company’s needs, getting business clarity, and learning how to avoid scams.

Another site you may want to check out is called Women Owned Business Grants. This site is designed especially for women starting their own business, whether a home-based business or an office-based business. The site gives many suggestions as to where to look for government funding. It also provides information on start up ideas, setting up small business management.

Another place to check out is called Small Business Investment Company or the SBIC Program. Since 1958, this program has provided approximately $30 billion in both loans and equity investments to 90,000 small businesses since 1958. They represent a successful partnership between the Federal Government and private investors. There are SBIC offices nationwide. Each SBIC defines its own area of interest, specializing in specific industries or locations. Some of the most well-known businesses in America got their startup money from SBIC, Apple Computer and Staples for instance. Specialized Small Business Investment Companies, SSBIC, specialize in applications from economically or socially disadvantaged new businessmen.

Another well-known source of new business capital is The National Association of Small Business Investment Companies, also called NASBIC. This is another venture capital organization, actually, the oldest organization its kind. Any startup business owner may be wise to checkout out this source as a way to acquire the necessary funding for their new enterprise.

Every year, the government–local, state, and federal–gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up grants, sources, free grant money CD, how best to fill out applications, grant management step by step tips, setting up a business steps at his website http://www.business-idea-grants.com

Get A Free Legitimate Home Based Business Report and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leon’s Home Business Website http://www.homebusinessit.com

Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter… with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven MLMs, even a start free work at home program.

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Franchise financing for first-time franchisees

Some potential franchise financing sources include the following:

- Personal savings and investments
- Borrowing from friends and family members
- Taking out a small business loan from a local bank or credit union
- Obtaining a second mortgage on your home
- Working with outside investors or investment capital firms
- Obtaining a loan from the U.S. Small Business Administration (SBA)
- Obtaining a loan from Canada Small Business Financing (CSBF

You must come up with the money to be in business!

The statistical truth is that the single most common reason new franchisees (and for that matter, all other types of new businesses) fail is that they did not have enough money going into the investment.

A responsible franchisor will not take on a new franchisee that does not have the appropriate financial resources to get the business off the ground and make it profitable

Determine How Much Money You Need To get Started

Opening a franchise requires a significant financial investment.

If the only benefit you received from joining a franchise system was an accurate estimate of the costs of developing the business, sources for equipment and suppliers, and the knowledge of how much working capital you needed until the business could support itself, the investment in a franchise may still be worthwhile. Because of this helpful start-up information, an experienced and mature franchise system is worth its weight in gold to a new franchisee.

An overall picture of what your start-up costs may look like

Franchisors reduce your time and costs on the learning curve. Franchising succeeds because the franchisors take care of the details you may not even think of.

Total start-up costs vary dramatically, depending on the franchise you select, varying from less than $10,000 to more than $1 million. A typical investment for a single-unit franchisee is usually in the $100,000 to $300,000 range. The franchisors disclosure document, provides you with a list of start-up expenses that will make up your initial investment

Most franchisors want to see a liquid (cash) capital investment of 35 to 50 percent of the total franchise cost (the franchise fee plus all start-up costs). They want to ensure that you have enough money, not only to get started but also to pay your bills, including any principal and interest payments on your loans.

Start-up costs may vary depending on whether you need to own or lease real estate to operate the business. Fixed-based franchises, almost always cost more than a franchise operating from a van or over the Internet.

Initial expenses you should anticipate

The franchise fee, which is the amount you pay the franchisor to offset the franchisor’s cost of locating, screening, negotiating with, and training you. It may also cover the costs involved in site selection and development, promotions, grand-opening events, and ongoing support during your first months of operation.

Franchise fees vary, depending on the franchisor. They can range from $0 (which is very unusual) to more than $100,00. The franchise fee for most franchisors is between $20,000 and $35,000. When comparison-shopping, pay particular attention to what services you will receive for your franchise fee and what other necessary services separate charges. The lowest, most appealing franchise fee may not be the best value.

As you identify a location, you will usually sign a single-unit franchise agreement. What you pay and how the franchisor applies the fee will vary, depending on the agreement.

Other start-up costs include:

Blueprints and professional fees…
Contractor fees…
Costs for finding the right location…
Décor packaging and signage…
Equipment and fixtures…
Freight and sales tax…
Improvements and construction…
Insurance…
Landscaping…
Opening inventory…
Real property and occupancy charges…
Zoning expenses…

In the disclosure document, a franchisor will provide you with a chart and notes concerning your start-up costs for that particular franchise.

John Bauer, a 20-year veteran of franchising, shares his extensive knowledge on his website http://www.whyfranchising.com. Start right. Finish successful. Here’s how.

photo credit: Yester Prints

The business world is often considered a dog eat dog world. In today’s weak economy, it can be difficult to secure financing for any business endeavor. Women often have a more difficult time securing the needed funds than men for the same type of business. Programs are in place, however, that are designed to provide assistance for women seeking to start a business or expand an existing business they own.

The government Small Business Administration (SBA) has programs that allow it to act as a guarantee agency to assist women business owners in securing loans from financial institutions. The SBA does not make the loans directly, but having its backing can make getting a loan much for a woman in business. The SBA can be contacted at sba.gov to ask questions or apply for one of their programs.

Some banks have affirmative action programs that are designed to help women and other minorities in securing financing for businesses. The requirements to qualify for special financing under these programs are typically not difficult. One key item to watch is when a husband and wife start a business together, if financing is secured under a program for woman owned businesses, the woman must be the one actually in charge. These institutions will often employ inspectors to look into businesses financed under special programs to ensure that the conditions for qualification are indeed being met.

While it may be more difficult, a woman can secure financing for a new or existing business on her own merit without using any type of special programs for women. The keys to doing so successfully are having a solid, well written business plan, being able to show realistic projections of anticipated income with loan payments scheduled in, and she must have a reasonable amount of her own money to invest along with the borrowed amount. A good personal credit rating is a must in these situations.

Most banks will deny loan applications made by anyone, man or woman, who has too low a credit score and/or does not have a sufficient amount of capital on hand to assure the bank that one is not just risking the bank’s money. They are even more difficult to obtain financing from given the number of business failures and banks requiring government assistance to stay open today. The current financial climate is not great for starting a new business and seeking financing for anyone and it can be more difficult for women.

Beware of scams when seeking to obtain financing for a woman owned business. A large number of ads claim to be able to sell a kit that can help secure a government grant for the purpose of starting a business. The government does have a wide variety of programs that provide grants for many different purposes pertaining to education, housing, and other needs. There are, however, no programs under which the government provides grants for the purpose of starting a business. If it did, everyone in the country would own their own government sponsored business.

Rebecca Game is a 30 year entrepreneur who founded the online community for women in business at Digital-Women.com It provides resources and tools for women starting a business of their own. Please visit her site: Digital Women – Loans for Women

This article may be freely used when author/resource box is totally intact with live link.

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Inviting investors to invest in your business is something you will want to prepare for in advance. Have a proposal ready with your business plans, goals, financial needs, and record of your achievements and past business ventures. If your franchise has a well-known brand, then make sure to note that the business is likely to succeed. Finding investors will not seem easy at first, but the more you get into it the more confident you will be and more likely to find interested patrons.

Retirement Money

A lot of new business owners run the risk of taking money from their 401k or other retirement funds to finance their business. While this is a risky step for a new entrepreneur, it is much less risky when you are opening a franchise, as the success rates are significantly higher. As long as you keep a tight budget, and remember to put money back into your retirement, it can be a very smart and fairly simple way to finance a franchise.

Borrow from Friends or Family

If you have friends or family who have money and a good sense of their finances then you might want to consider giving them a call. If you do not know one person who could loan you the full amount then consider borrowing smaller amounts from a handful of people.

Standard Loan

Getting a loan from a bank can be more difficult, especially in our current economy, but it does come with benefits. However, bank lenders will want a lot of information, financial history, and collateral to convince them to lend to you. Be prepared with a full business plan, including past business ventures and all new information on your current project.

SBA Loans

The Small Business Association (SBA) is dedicated to helping people who want to start a new business. Many new franchisees look to the SBA, and find their process fairly simple and painless compared to other options. Take a look at their site or just give them a call to find out what you will need to qualify for a loan. Remember, it does not cost anything to ask a question.

Franchisor

Your franchisor may have a franchisee money-lending program to help them help you. It is in your franchisors best interest that you do well, and if they are confident in their own franchise plan, then the may be willing to help you seek out financing. Additionally, your franchisor might have alliances with banks that could help you get approved for a loan.

The Roni Deutch Tax Center is one of the nation’s hottest income tax franchise. For more information on owning a franchise visit RDTCFranchise.com, or check out Watch Me Franchise to see what it is really like to run a franchise business.

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This article provides an overview of several business finance factors that commercial borrowers should understand before attempting to obtain a Small Business Administration loan (SBA loan) to buy either commercial real estate or a business opportunity investment. There are many commercial mortgage and business loan misunderstandings involving the use of an SBA loan due to the complex nature of this approach to business financing.

Two of the most difficult business loan and commercial mortgage situations for a business owner involve obtaining a Small Business Administration loan and refinancing an SBA loan. There are practical business finance solutions for both of these common business investment problems.

Are SBA Loan and Business Finance Programs Difficult?

There are usually two schools of thought about getting a Small Business Administration loan to buy a business:

(1) Avoid this kind of commercial loan at all costs.

(2) Use such a business finance loan whenever possible.

These conflicting investment financing viewpoints are due to a commercial mortgage business loan process that is perceived as complex and difficult by many commercial borrowers.

In reality SBA loan programs are more practical than they often appear. It is critical to the success of a Small Business Administration loan program to be working with a business finance advisor and lender that is proficient at this difficult commercial mortgage and commercial loan process. There are many potential commercial financing problems to avoid when attempting to obtain a small business loans, and very few lenders are skilled in this business financing area.

Anticipating Business Investment Problems Before They Occur: Business Loan Refinancing

One of the major investment drawbacks of an SBA loan has historically been the difficulty of refinancing the Small Business Administration business financing later. Current options have revised the situation and it is more feasible to arrange refinancing. It is still accurate to say that refinancing is not routinely available, but more importantly it is much easier to obtain than it was in prior years.

Advance commercial real estate loan and commercial loan planning can avoid some of the SBA loan refinancing problems. First and foremost, if the original business financing is arranged without a small business loan, this will make later business refinancing easier than if a Small Business Administration loan is involved. This means that commercial borrowers should at least consider if the initial business loan requires this form of commercial financing before proceeding.

Finalizing Small Business Financing: Two Common Commercial Loan Misunderstandings

One of the most frequent criticisms of an SBA loan program is the amount of paperwork required to complete the business loan and commercial mortgage process. What many commercial borrowers fail to understand is that any business financing process is likely to involve substantial paperwork and formal documentation requirements. In the end the key is working with a business finance advisor that understands what is required and can facilitate the submission procedures.

Beyond the paperwork concerns, a more critical and real problem is working with an SBA lender that is not very good at successfully completing Small Business Administration loan requirements. Even though there are many commercial lenders that publicize their ability to process these complicated and specialized commercial loans, in reality there are very few lenders nationwide who are consistently successful at completing the complex loan process in a timely manner.

Alternatives to SBA Loan Financing – Conventional Real Estate Investment and Business Opportunity Loan Options

Conventional business finance options should always be considered simultaneously with the possibility of obtaining an SBA loan. As noted above, the feasibility of refinancing a business loan or commercial real estate loan in the future will depend heavily on the choices made by a commercial borrower when obtaining the initial commercial mortgage.

A conventional business loan or commercial mortgage might be more feasible than many borrowers realize. Refinancing is likely to be more successful if an experienced business finance lender and advisor are involved.

Stephen Bush is a commercial mortgage and business loan expert. Find out more about business financing and working capital solutions provided by AEX Commercial Financing Group at => http://aexllc.com