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If you have gone through the process of having applied for a home loan or two, you may think that you know exactly how to apply for a small business loan as well. Unfortunately, business loans are a little more complicated than personal loans, as they are secured by more complex, less tangible and consistent criteria, and are given out much more hesitantly, and with higher downpayment requirements than home loans.

The first thing that you have to know about how to apply for a small business loan is that you will have to submit a written proposal detailing some critical information about your business. This will include a detailed but concise description of the business’s history, including the purpose, financial background, details on liens and property holdings, and information about the business’s officers. The proposal should also contain information about the business’s market, including a detailed breakdown of the products and services that are offered, the nature of the market and the plan for making money with the business’s services, an explanation of the consumer demand and some details about the competition. Finally, you will need to attach information about collateral; what kind of assets you have, what sorts of property you and your business hold, and a good run-down of your management credentials.

This is certainly more complicated that filling out a few forms, but it is the best method for how to apply for a small business loan. Business lenders need to know that they are going to have a secure investment when they distribute their funds. It is your job to show them that you have a sound business plan and the ability to pay their loans off with no problems.

So now you have a good idea of how to apply for a small business loan, you can start with a good understanding of your business credit and a knowledge of what is expected. Knowing how to get business loans is a good start to understanding the art of the deal.

This Business article was written by Mark Karavan on 1/20/2010