Getting a small business loan in ColoradoJanuary 2016 / Share
For yourself and many other of Colorado's entrepreneurs, acquiring a small business loan is an important first step to taking an idea off its feet and turning it into a reality. The money you acquire can help hire employees, rent office space, mass produce a product and start advertising. However, in order to take out a loan, there is a process to go through. Banks don't hand out money to just anyone on the street, so as a small business owner, you need to prove that you are going to be able to make enough to pay the loan back.
Given the recent population boom all over the state, especially Denver, the time is right to launch that small business idea. Understand the process of taking out a small business loan before getting started.
Every bank or lending agency will have its own unique criteria for acquiring a loan. However the U.S. Small Business Association guarantees specific types of loans , and in order to have their backing, a business must outline its size and what it will use the money for. Additionally, the SBA will investigate your credit history to make sure you are able to pay back the loan eventually. And finally, most banks will want to see that you have either spent or raised your own money. An entrepreneur without any of their own skin in the game is a red flag for many lenders.
The most common type of small business loan is 7(a), and in the first nine months of 2014, banks around the state issued 907 of those loans. That equals more than $270 million worth of small business loans , the Colorado District Office of the SBA reported. With so much competition, you must make sure you are able to fill the requirements of a bank to take out a small business loan, or risk losing your financing to someone else.
Know where the money will go
Not only will banks want to know where their loan is going to be spent, but so will other investors, employees and customers. Having a plan for the loan increases the chances you will be able to acquire the financing you need.
Many small business owners use their loans to expand their office space, Entrepreneur magazine explained. If that's the case, look at different available buildings you are considering in order to determine what your purchase or renting budget is. Obviously, certain parts of a city or state will be more expensive than others.
Guidance Corporate Realty Advisors stated that in 2014, the average leasing rate for Denver's Central Business District, where 14.2 percent of properties were vacant, was roughly $30 per square foot. In Boulder, however, only 1.7 percent of space was available, driving up the price to more than $39 per square foot.
Vectra Bank can help you secure the small business loan you need. Visit a local branch today to speak with a financial professional.
The information provided is presented for general informational purposes only and does not constitute tax, legal, business or investment advice. Credit approval required. Terms, conditions and restrictions apply.