Can you answer some of my questions about small business loans? What should I do?

I am wanting to start a business. I went through much training for the business I am starting, however, no one has told me the answer to a few questions.

1. How much is typical to ask for. I don't want to get denied, denied, denied. But the more I have upfront the better my business (based on the type of business I am starting)?

2. I am going to be a co borrower because I personally have little to no credit, but my co borrower has great credit but just bought a house which might hurt a little. Do these things matter much?

3. Will it help that I have over trained, in school for business, and have experience in the field to get a loan?

4.Where can I go (some good options) to get approved?

Something you should take into consideration, is that it is very hard, to get a business loan right now for established businesses. It's infinitely harder for a startup. If you are requiring a cosigner for a business loan, they will most likely need to be an owner as well.

The more experience you have running a business the better off you are, but right now is not a good time to try to get a loan. Banks are on all but complete lockdown. I don't want to be discouraging, but if you can't put a house you own, or something you have significant equity in, on the line, there's very little chance of a bank lending anything. Most businesses that I have seen startup in recent months have been funded by friends and/or family.

So as to how much you should ask for. You should have some projection as to what going to be required to succeed. You need to ask for how much it is going to take to create a successful business, and probably a little more. If the minimum cost to get going and create a sustainable business is $20k, then asking for $10k isn't going to do anyone any good, even if you can get it.

1. How much is typical to ask for. I don't want to get denied, denied, denied. But the more I have upfront the better my business (based on the type of business I am starting)?

You should ask for the amount you need. Asking for too little or too much are both ways to get turned down. You need to have a business plan showing everything about your proposed business in excruciating detail, including how much money you will need to start up, how you are going to spend that money, and how you are going to pay it back.

2. I am going to be a co borrower because I personally have little to no credit, but my co borrower has great credit but just bought a house which might hurt a little. Do these things matter much?

They don't matter as much as having a solid business plan, with pro-forma financial statements. However, I have seen banks finance plans based mostly on the ability of a co-signer to pay the loan back. Sometimes you don't even need a plan; if your co-signer can still afford the payments on your loan if you default, even after buying a house, then you may get the loan based on that. I don't recommend that though; you should have a good enough business plan that you can get the money based on that, not on the ability of a co-signer to bail you out. Also, you need to consider the co-signer's part in the business: Just a friend, partner, manager? How will YOU pay the co-signer back if you crater in and he/she has to pay off the loan?

3. Will it help that I have over trained, in school for business, and have experience in the field to get a loan?

Yes, that will help a lot. No banker/financier wants to back someone who doesn't know his business.

4.Where can I go (some good options) to get approved?

Try checking with your local SBA (Small Business Administration) office, and talk to the loan officer at your bank as well as all the other banks in the area. You may have better luck with a local, community bank that is committed to supporting local business. Also, check and see if your local college has a business resource center/incubator. Another avenue is to check your area for Community Development Corporations that are involved in economic development. Sometimes they have good resources, and even micro-loan programs. Also, talk to a lawyer, accountant, and/or a consultant about the best form of organization and the best way to finance your business. You can also find consultants who will help you write a business plan, do it themselves, or do the parts you can't handle (usually the financials.)

A small business loan is one of the most treasured commodities in the business world. It is still very hard to get despite the claims and promises of banks, credit unions and other lending institutions that they want to help American small business to survive and grow. In fact it sometimes seems that banks and other lenders want to see small businesses fail and only support those that survive the battle for customers, revenues, and finances during their first two years.

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Getting a small business loan is most difficult during these first two years, when most businesses face a myriad of challenges involved with not only opening their doors, but hiring and training staff and meeting the demands of customers, clients suppliers and vendors. The main reason that the banks use for not granting many loans during this period is like the same reason that a student can?t get a job coming out of school. They don?t have the experience.