How Can I Get a Small Business Loan?

Good news! I survived my first two years in business for myself, and am actually doing okay right now. Some new pricing packages have really saved me in this economy.

When I purchased the business, I had to pay a higher interest rate for the loan. Now that I’ve been in business for two years, I thought I would look at a new business loan to replace the old one at a much better interest rate. Not to mention, that would significantly improve my cashflow, since I’ve paid down the loan over the years.

I have the income and perfect credit, so in theory, banks should be willing to talk to me. My own bank referred me to their “work out” department for proactive borrowers to see if we could restructure the loan payments to be more favorable. They said they’d get back to me in 7-10 days.

To be honest, while that would be an ideal solution, they seemed rather disinterested in helping me out. Not to mention, I’d rather be proactive and seek offers from other banks.

Is this even possible? Or are the credit markets still too frozen for even someone with perfect credit like me? If not, then where can I find a bank that will take me more seriously? I’d rather have a referral, instead of relying on google.

Thanks a lot.

Well, wait for them to get back to you and go from there.

Shopping for a loan is like shopping for anything else. I like to use one or two commercial brokers and hit 2-3 banks on my own. When it comes to commercial loans I have had most success with local banks. I have found they are willing to look at your enitre picture not just seeing if you fit into their little box. Call some local lenders and ask to speak to their commercial loan officer. Tell them what you would like to do and ask them if their bank would be interested in your project....ask what kind of rates and terms they are offering. This is a good starting point.

Try SBA loans. Contact SCORE or any other business "helpers" in your area for direction. should be able to find local lenders that do SBA loans, etc.

Thanks for the tips, everyone.

I looked up some local banks that did SBA loans. One seemed very interested. The others I found at least seemed more interested than my current lender. Of course, if all else fails and my current lender is the one left standing, I’d happily restructure my loan with them.

On a side note, the bank that was very interested in me said that because of help from the government, many of the fees normally associated with the loan will be waived.

It appears my efforts are going to pay off. Although we haven’t finalized it yet, my bank seems to be more negotiable now. I’m not sure if it was the other offers I got or maybe they reconsidered their position over time, but it appears I’ll be able to get exactly what I want.

In effect, we’re going to extend the maturity date (I think that’s what it’s called) of the loan out by 2 years, which will effectively increase my cashflow by $500. When I asked if they would be willing to eliminate the early payoff fee that was in my original loan documentation, they obliged this time, when they said they wouldn’t earlier. This provides a clear advantage over other banks, where I would have to pay an additional $2K in early payoff fees for the old loan.

The only drawback is that I’m going to end up paying an extra $3K towards interest over the life of the loan. However, given the size and duration of the loan, that seems like negligible amount and well worth the increase in cashflow today.

Thank you for your support, everyone.

Good going. Way to take action!