Home Business Loans

Securing a Loan for a Home Business

Securing a loan for a home business is possible, although it may be a little harder than obtaining a loan for a traditional business. On the good side, women's home businesses are flourishing today, as many people are choosing to telecommute from home, and are operating legitimate businesses from their homes. Many mothers have been running businesses from home for many years.

Securing the loan requires much of the same work for a home business as any business. It is necessary to put down on paper a business plan, and a cash flow statement. When approaching a lender such as a traditional banking firm or loan broker, having concrete facts and projections is very helpful in making the case for getting that loan.

It may be necessary for women to obtain a collateral based loan, meaning something tangible is put up as security, such as a house or vehicle. To obtain an unsecured, or signature loan, requires excellent credit history and credit score, and a long relationship with the lending office is also helpful.
 

There are several ways to go about securing a loan for a home business:
1. Traditional bank lending
2. Loan specialty agencies
3. Payday or fast cash advance stores or websites
4. Friends and family
5. Non traditional ways: pawn shops

The method chosen depends on the amount of money that is needed. For small amounts, under $500, it may be possible to raise the needed money from pawning or selling items, borrowing from friends and family, or taking out a short term loan such as a payday loan. For larger amounts, there are loan vendors and banks or credit unions. For very large amounts, there are some government programs such as those found in the SBA (Small Business Administration) that are specifically designed for small businesses. The biggest obstacle to overcome is that a business in a home may not be viewed as a "real business".
 

Bad Credit Loans

There are many types of home businesses that might require a loan, including:
1. Cleaning businesses
2. Bookkeeping or Accounting
3. Typing, writing, public relations, media or advertising
4. Parts business or jobber supplier
5. Drafting or engineering consulting
6. General consulting, many areas of expertise

To compose a business plan, basics include who, what, when, where, and how, and financial information. Be sure to include details on how to market, finance, and manage the proposed business. The SBA has detailed information on writing a business plan, and important articles regarding starting and running a small business. (www.sba.gov/smallbusinessplanner/index.html)

For the lender, assemble all related financial information. Estimate two years out, including requirements for operation, equipment, payroll, housing, vehicles, vendors, manufacturing, marketing, and sales. Financials include previous tax returns, assets and liabilities, and basically everything possible about personal financials. Include the amount of money needed to borrow, and any other sources of financial support as well as personal and business obligations and other vested interests. Securing a loan for a home business is a professional matter and should be approached in that manner. 

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