Wouldn’t it be great to have your own guide to getting a small business loan? The last time we checked, no definitive guide exists. So, we decided to give it a go. Before getting into specifics, however, let’s do a quick detour toward your television set and witness small business loans in action.
Some Lessons from Shark-Style Small Business Loans
Why is ABC’s Shark Tank one of the most popular TV shows going right now? Good question. Here are some possible answers:
- A perfect mix of aggressive (at times, abrasive) personalities, making for just the right amount of conflict.
- Wonderful, Kevin O’Leary.
- Wild, wacky, off-the-wall ideas.
- Mark Cuban’s unique, informative insights and ultra-blunt advice.
- Provides multiple weekly chances to ask yourself, “Why didn’t I think of that?”
- Did we mention Mr. Wonderful?
- The chance to see how much (or how little) an entrepreneur estimates their business model’s worth.
Those are all valid reasons, and they all contribute to the show’s impressive Friday evening ratings. Shark Tank has turned a throwaway weekly TV time slot into must-see programming.
But here’s another reason for the show’s success, although it’s not considered an obvious one: the TV show streamlines, compresses and accelerates the business loan process.
When you get down to the show’s purpose, it is essentially this: will the Sharks offer a small business loan? That’s it. Shark Tank takes the otherwise drawn-out, dull, dreary aspects of the business loan process and throws it in front of millions of viewers – plus a handful of profit-hungry Sharks – as a take-it-or-leave-it, sink-or-swim proposition.
Of course, most businesses aren’t on TV trying to earn a loan. The process is much slower, and can be much more frustrating – especially without a “road map” of sorts to lead the way.
The Relevance of Business Loans…and Your Road map to Success
Whether a business loan is secured on a TV show or the real world, the facts are the same: getting that crucial early-stage funding is instrumental for eventual success. While it’s true that dogged persistence can overcome failed loan efforts, it’s also true that receiving a timely loan not only adds much-needed capital to a business’s budget, but also brings a boost of confidence to any enterprise.
What are some different ways your small business can secure funding?
Go with a dedicated small business loan advocate. Lendio, for example, specializes in helping small businesses connect with all sorts of business capital, from sources all across the country. Lendio’s “open marketplace” model of small business financing has helped many small businesses thrive and prosper in the often competitive, penny-pinching environment of business loans.
Explore all available options. Funding your small business can take the form of a loan (short-term and long-term), a business line of credit or unconventional funding methods. “Unconventional,” in this case, could mean the promise of future profits for present cash (such as a royalty agreement), the transfer of intellectual property and more.
Try Uncle Sam. The Small Business Administration (SBA) is just one of several government plans that are designed to help small businesses get off the ground. The SBA has been around for more than 60 years and has assisted thousands of businesses. They’re just one of many public-funded agencies willing to help. A note of caution: government small business loans are not as common as a generation ago.
Venture out. When so-called “by the book” or “official” methods aren’t working, consider going the venture capital route. This attempt ventures into Shark Tank territory (see above), but you’d be surprised at how many wealthy renegades are willing to take a chance on (what they see as) a good product or service. Venture Partners, Sequoia Capital, Azione Capital and Ignition are a few sources with a proven track record of success.
Ask family and friends. Your close inner circle will be happy to help you launch your small business off the ground, after all they want you to succeed. Go around pitching your idea to your extended family and offer them a stake in the company. You can also set up a crowd funding page and share it with your network. You need money, and they have money. It’s not the preferred way to come across small business capital, but you wouldn’t be the first person to try.
Now comes the hard part. Once you’ve decided how much you need, what the money will be used for, which lenders or sources to ask, cleaned up your credit score (a personal score of at least 700 is recommended), and compiled your loan application package, the next step is to…well, sit and wait. Hopefully the decision won’t be too far off, but patience is a virtue, especially in the hectic world of small business loan processing.
Your road map to securing small business capital is likely different from other organizations. But with enough hard work, belief in your company and the confidence to see your plan all the way through, your small business loan will soon become a reality.