According to Marxists business refers means of production. Business can be small or big. Few of the major businesses are banking; accounting, Advertising, broker ship, Electronic commerce, Marketing, Manufacturing, Retailing and Organizing etc.Businesses vary in size. Business could be large or small depending on number of employees, turn over, age of business etc. Starting a business requires a different set of tasks and skills and growing a business requires different skill sets. Capital is one of the major requirements of Business. Capital can be arranged by Self-financing by the owner through an equity loan or by loans from friends or relatives or by private means or by public offer on a stock exchange or forming partnerships or Venture capital.

Business Loan

Loan is financial help given by lender to borrower. Mostly it is returned back with interests. Lender could be anybody a bank, a government organization, private organization or some person similarly borrower could be any body a country, a state, any government or private organization, a student or any businessman. Business loan is the loan which is given for business. It can be used to establish, expand, modernize or improve business. The criteria for loan vary from bank to bank.

If you are planning to start up business, always remember three words the training (may be a business management degree) coaching (experience by working for sometime in some big organization may be with the same profile or field in which you want to set up your business) and resources (funds and capital).The best thing regarding capital is to have your own money if not completely then at least 50%.Try to save money, try to be frugal. But if self financing is not possible, then before going out to find a lender prepare yourself. Bank authorities look for credit, collateral (property) and character. You should not have any criminal record. You should have clean credit record .No credit should be unpaid. You should have proper business and personal financial statements. You should also have business and personal tax returns If you have some property in your name or some fixed assets ,building ,office area, raw material or some other inventory getting loan becomes easier and faster.

Before going to meet bank authorities always take a prior appointment. Take along with a complete and concrete business plan with budget. Make sure that budget should look realistic .Period for loan should be specified properly. To be on safer side ask loan for more period then required. Take help and advice from informed people, check and recheck your plan, rehearse your talk as it gives confidence in front of bank authorities. Also have a concrete repayment plan. How fast you can start with repayment. Lenders appreciate that you are thinking about paying them back instead of just getting a loan. Show your positive attitude. Be optimistic. Sound confident in front of authorities. But at the same time avoid giving the impression of being an over optimistic. Dont try to be the "pie-in-the-sky" operator.

Thus all the following information required before meeting loan officer is:

The purpose of the loan specifying the business along with business plan.

Need for the capital investment. Clear Budget and repayment plans.

Social Security number and Business Tax I.D. Complete papers of last tax return.

Value of personal assets and collaterals.

All credit information including Balances on personal loans.

Also get complete co-Applicant information.

The different types of bank loans are:

Secured loans are loans that are secured .These loans are issued against some type of guarantee. It could be a personal guarantor or by collateral. Usually the bank prefers to keep your property papers in guarantee. If someone fails to repay loan or interest than lender can seize and sell the property to get his money back. One can get loan up to 60-70% value of property.

Unsecured loans are the loans given without any guarantee. It is a loan that is given just on promise to repay it back on time and with proper interest rate. It is the most risky form of loan. It is very rare and difficult to find a lender willing to give an unsecured loan for a new business.

Fixed Rate Loans are the loans where the interest rate does not varies .The monthly payment of loan stay the same over the length of the loan.

Adjustable Rate Loan/Floating Loans are the loans where interest rate changes as per the market growth. The interest rate also changes, and the monthly payment also changes.

Short-Term Loans can provide you with capital to set up your business. The length of the loan varies from 1 year to 3 years .These are usually secured loans with fixed interest rates.

Long-term Loans are mainly available for purchase of raw material or machinery or equipments or any other fixed assets. They are for more than 3 years. These loans are secured by the assets being purchased and mostly have floating interests rates.

Some facts about business loans:

Getting a loan for new business in not impossible but a tough job.

To get loan to expand profitable business is easy but for a business operating losses is difficult.

More the owners investment, better the chance to get loan.

Loan can also be taken for the purchase of machinery, property or any other fixed asset.

Having a guarantor increases the chances of loan.