How to seek out small business loans

Small business loans are practically the same as personal loans in that YOUR personal credit worthiness is at stake.  You've got your ideas, your business plan, and your desires, now all you need is the money to fund your dreams of being a small business owner. Getting a small business loan can be easy or hard depending on how well prepared you are. Here are some tips to help make sure you are prepared when it comes time to ask the bank for money.

Documentation: Since your personal credit history is an important tool in evaluating how well you manage your personal finances, Be sure and bring your credit report, as most banks assume you manage your business like you manage your personal finances. This is especially important if your business does not have a long operating history.
Be sure and bring  any financial statements for your business.Banks will want to see your business’s financial health. banks also want to know how much the business is worth and how much money you’re spending (expenses) and how much you're bringing in (profit). If you’re really serious about obtaining small business loans, then it's wise to prepare  pro-forma statements that are as detailed as possible. These give future projections about what your business will be worth going forward. The last thing you want to make sure and have is an updated business plan.    Banks typically give small business loans to those who have everything planned out. Be sure and prepare a plan with as much detail as possible. Including bios of you and your partners,  track record,  strategies and advantages.

Choosing your targets wisely: So where do you start looking for a business loan?  First, try the institutions you already do business with. Chances are you have established a relationship with them already and they know about your history and financial well-being. If that is not an option, look in your local newspaper's business section for banks or institutions financial offerings for loans. Also look into credit unions as another way to possibly get the loan. Another common way of obtaining loans is through angel investors and venture capitalists. There are several resources online to that pair these high risk venture capitalist and investors wih businesses they are interested in funding.

Never give up: Thats right, Never give up!  A few rejections doesn't mean its time to throw in the towel.  There are a TON of resources out there to help you and all you have to do is show up and keep actively looking and applying. As the late Randy Pausch once said, "Brick walls are in place to keep the other people out and to find out just how bad you want it." Wise words from a wise man. So ask yourself, how bad do you want it? If you want it bad enough, you will find a way to get it.

Fo more information and resources for small loans visit About.com's small business page here.