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ed by the U.S. Small Business
Administration. Others might include accountants and financial
advisers.
Once you are satisfied that your proposal is in good shape
to present to a lender, set up an appointment to discuss your
application. You will find that the lender can also be an
excellent source of business and financial counsel.
If Your Application Is Not Approved
Most lenders, banks especially, are conservative in
granting business loans. Given the obligation to their
stockholders and depositors, they need to be sure there's a good
chance the loans they make will be repaid.
If your application for credit is not approved, find out
the reasons why. Some of the reasons that lenders often give
for denying a business loan include, for example, insufficient
owner's equity in the business; lack of an established earnings
record; a history of slow or past-due trade or loan payments;
or insufficient collateral. Finding out the reasons may help
you qualify the next time you apply.
The lender will keep you informed about the status of your
application. If you are considered a "small business" (when
your business revenues are $1 million or less, or when you are
applying to start up a business), a lender has 30 days to let
you know, either orally or in writing, whether or not you get
the loan. The 30-day period begins after the lender has
received all of the information needed to evaluate your credit
request. If your application is denied, the lender must give
you either:
* a written statement of the reasons for denial, or
* a written notice telling you of your right to obtain the
reasons in writing. This notice may be given to you during
the application process or at the time of the denial.
The lender also will keep for one year the records relating
to your application.
Different rules apply for larger businesses (those with
more than $1 million in revenues}. Within a reas
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