Commercial loans can be a valuable source of needed capital for qualified business borrowers. Small businesses sometimes seek loans from institutional lenders, such as credit unions, insurance companies, and pension trusts.
Unfortunately, institutional lenders other than banks will rarely deal with small businesses, particularly when the potential borrower does not have an extensive track record. It is for this reason the focus of this chapter is on bank lending. You should, however, consider these other sources of funds when seeking a loan. Most institutional lenders follow the same procedures as banks and demand the same type of information.
Lending policies vary dramatically from institution to institution. You should talk to several banks to determine which might be likely to lend to your business and which have the most favorable loan terms. While lenders, by nature, are conservative in their lending policies, you may discover some to be more flexible than others. To save time and increase the chances of loan approval, it makes sense to first approach those banks that are most likely to view your proposal favorably and whose lending criteria you feel you can meet. You should not necessarily limit your search for a loan to your community. A statewide, regional, or even national search may be necessary before you find the right combination of willing lender and favorable terms. With the Internet, this is not as difficult as it once was.
Unfortunately, institutional lenders other than banks will rarely deal with small businesses, particularly when the potential borrower does not have an extensive track record. It is for this reason the focus of this chapter is on bank lending. You should, however, consider these other sources of funds when seeking a loan. Most institutional lenders follow the same procedures as banks and demand the same type of information.
Lending policies vary dramatically from institution to institution. You should talk to several banks to determine which might be likely to lend to your business and which have the most favorable loan terms. While lenders, by nature, are conservative in their lending policies, you may discover some to be more flexible than others. To save time and increase the chances of loan approval, it makes sense to first approach those banks that are most likely to view your proposal favorably and whose lending criteria you feel you can meet. You should not necessarily limit your search for a loan to your community. A statewide, regional, or even national search may be necessary before you find the right combination of willing lender and favorable terms. With the Internet, this is not as difficult as it once was.
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