How to Get a Commercial Loan If You Are Self-Employed

Congratulations. You have decided to go into business for yourself and are now looking for a loan to help launch your business. In this downturn economy, getting a commercial loan can be a lot more difficult as more companies are cautious with lending money. Lenders in general are also very weary to lend money without having some type of guarantee, especially if you are a business that is not established. Although you do have challenges ahead of you, it is still possible for you to get a commercial loan. The following are the steps you’ll need to take to get the funding that you need.The first step is to get your credit in order. Even if your business has its own credit file, your personal credit is going to be reviewed as well, as there will most likely have to provide a personal guarantee. In case problems arise with the business, the lender will need to be assured of your ability to pay. If you have a lot of debt and a poor payment history, that will definitely impact your chances of getting a loan. In order to look as good as possible to the lender, try to pay off as many outstanding debts and resolve any payment issues with creditors.The next step in getting a commercial loan is to have a good business plan. A detailed business plan, complete with a budget, financials, and a thorough description of how business operates. The more detailed you are, and the more sound your business plan is, the more a lender can be assured of the strength of your business and your ability to repay the loan. If you have a professional expertise, or track record in the industry that pertains to your business, the more attractive you will look to a financial institution. Conversely, if you appear inexperienced on paper, or don’t have much work experience in the business you’re pursuing, the weaker your chances are and the stronger your plan will have to be.Applying for a commercial loan requires a lot of time and preparation. And although these loans are usually short term, lasting anywhere from 30 to 90 days, you still have to provide a large amount of information. The process may seem tedious, but it will pay off in the long run if you are successful in qualifying for the loan. If you do not qualify, there may be other alternatives that you can pursue, but by putting your best foot forward with a good credit history and strong business plan, you are maximizing your chances of getting funding from any financial institution or lender.