Let’s face it, when it comes to loans, small & mid-size businesses (SMBs) are the least recipients of loans from either the banks or any other financial institutions. Despite the touting of banks proclaiming themselves as the real service providers to SMBs, most banks do not make loans to SMBs unless it is 100% secured by real estate or guaranteed by the Small Business Administration (SBA). On top of it, the requirements are so rigid that many SMBs do not qualify. For example, the bankers require personal guarantees from owners of SMBs. Also, credit rating (FICO) must be very high (some require 700+) of the person guaranteeing the loan as well as of the businesses.

The first step is to determine the type of loan or financing option suitable to you, for example, conventional bank loan, equipment financing, factoring, etc. The next step is to learn the process and the requirements for each type. The last, but most important step, is to locate and go to the right source.