Business and Finance solutions

If you need more than a few thousand dollars, you may be forced to visit your friendly neighborhood bank or lending company and apply for a small-business loan.

Lenders, of course, require you to give them back the money you borrowedwhich means you have to include the loan payback in your financial plans. (This is also the case when you borrow money from friends and family.) You also have to factor in interest payments, which can be significant. This means, of course, that when you’re putting together your financial plans, you have to make sure you generate enough profits to cover the loan and interest payments.

Still, if your funding needs are large enough, taking out a loan may be your only option. If this is the case, make sure you borrow no more (or no less) than you really need and that you can realistically pay back on a regular basis. Also be sure to shop around for the best rate possible. When you’re talking about the large amounts typical of business loans, a difference of a quarter or an eighth of a point can significantly affect your total payback and your monthly payments.

When you’re preparing to approach a banker or a loan official to ask for a loan, remember that lenders aren’t expecting some huge payback on their investment; they merely want their principal back along with the designated amount of interest. What they’re interested in, then, is your ability to repay the loan.