Sometimes, some amounts of money are required to develop a business, pay for equipment and materials, cover cash lack and fulfill obligations. Banks cannot issue them urgently or may refuse if there is no suitable collateral.
For what purposes can you receive Michigan business loans?
Such lenders in Michigan, MI issue loans for the following purposes:
- to open new lines of business and points of sale;
- to replenish working capital;
- to cover cash gaps;
- for the purchase of vehicles, machinery and equipment;
- to fulfill obligations when participating in public procurement;
- for the purpose of purchasing goods.
Basic requirements for borrowers
To take out a business loan Michigan, a client must:
- have the status of a legal entity or individual entrepreneur;
- be a resident of the United States;
- carry out activities for 6 months (in some cases – from 1 year);
- have a running business;
- not be in the process of bankruptcy.
They work with most areas of business. It can be trade, information technology (IT), various services, cafes, restaurants, production. The following factors are taken into account:
- the company’s revenue;
- data on business owners;
- in some cases – the absence of debts to the Federal Tax Service and legal disputes.
The amount of the loan for business development and other purposes, as well as the maturity of the debt, are determined by the degree of the client’s reliability. Any lender will check if you have had any delinquencies on previous loans, disputes with counterparties regarding payment obligations.
How to submit an application for Michigan business loans?
To get more information about loans for the development of an existing company:
- contact company’s website through an online application;
- leave a request on the site using the feedback form.
A personal manager will answer all your questions, select individual terms, taking into account your requests and the state of the company.
SBA in the USA: how to get started
To get started with SBA, you need to create your profile on the organization’s website and try to fill it out in as much detail as possible. Opening it, the lender must clearly understand what the company and its activities are, what is the purpose of issuing a loan, the timing and period of debt repayment.
In the application, you should definitely tell about all these points:
- type of company;
- describe a product or service;
- provide a short history of the company (when it was created, how long it has been operating, who are its owners, what form of ownership, and so on);
- provide information on annual sales, profits, payback;
- indicate the number of employees;
- the competition level;
- tell about potential customers and suppliers;
- management experience (include a resume of each owner and staff in management positions.
The borrower must provide a forecast of future operations at least one year in advance. This can be done in the form of a diagram. This is necessary in order for the lender to understand how a businessman assesses the general state of the industry, what plans he makes, how realistic he assesses the situation on the market.
It is also necessary to fill out the SBA 4 request form. Here the undertaking should describe how exactly the loan money will be used, in what amount, and also say what type of loan is required.
In the “Repayment of a loan” section, you should write about how and during what time the loan will be repaid (all terms should be clearly specified). The sources of repayment are also worth mentioning.
In your profile, you must also provide a list of real estate, assets that will serve as collateral. Without this item, you should not count on financial assistance. All applications for funding must be supported by the indication of at least two sources of repayment.
The SBA may require financial statements from all owners, partners, employees and shareholders of the borrowing company who own 20% or more of the business. The organization may also request tax returns for the past 3 years.
It is worth attaching a schedule of debt obligations to the application. The more complete the information provided, the more chances that the loan will be issued.
It is also necessary to attach to the documents for issuing a business loan in Michigan:
- commercial real estate lease documents (copies);
- franchise agreement (if any);
- share purchase agreement;
- company charter;
- business plan;
- copies of licenses;
- letters of recommendation;
- partnership agreement.