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Approval of your loan request depends on how well you present yourself, your business, and your financial needs to the lender. The best way to improve your chances of obtaining a loan is to prepare a written loan proposal or business plan. Lenders look to a loan proposal as evidence that your business has strong management, experience, and a thorough understanding of the marketplace.
Credit HistoryTo help determine your ability to repay the loan, lenders will often order a copy of your personal and business credit reports from one of the three major credit bureaus: Equifax, Experian, or TransUnion. Before you even start the process of preparing a loan request, you will want to make sure that your credit history is accurate and that any errors in the report have been corrected. To get copies of your credit report or to correct any errors, contact the credit reporting agencies. If you need help to repair your credit history, contact a local credit counseling service.
North Dakota District Office
Loan ProposalBefore you begin writing your proposal, there are four things that you need to be able to clearly address:
There are many different formats you can use for a loan proposal. You may want to contact the lender to determine which format is preferred by the lender. Generally, a loan proposal should include these elements:
SBA LoansThe SBA reduces risk to lenders by guaranteeing major portions – up to 85 percent – of loans made to small businesses. This enables the lender to provide financing to small businesses when funding is otherwise unavailable on reasonable terms.
When a small business applies for a loan, the lender will review the loan and decide if it requires additional support in the form of an SBA guaranty. The lender will then contact SBA regarding a guaranty. SBA programs require a lead lender.
Local AssistanceYour goal in preparing a loan proposal is to show the lender that your business or start-up is a sound investment and will generate solid returns. Planning and preparation are key aspects to receiving the financing you need in your business. Free and confidential assistance in preparing a business plan and financial projections is available from local SCORE and Small Business Development Center counselors.
Al Haut was selected to lead the SBA North Dakota District Office in 2017. He received a Bachelor of Science and Masters of Business Administration from Minnesota State University-Moorhead. Al grew up working in a family small business in central North Dakota and has also served as an adjunct professor with the University of Mary - Fargo. He can be reached at