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Follow the payment plan you agree to with your certified specialist and you are on the way to being debt free in less time and for less money than if you did it on your own.

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Small Business Loans Guide

If you’re planning on opening a small business, your entire plan will probably depend on the amount of money you are able to secure. Unless you have a trust fund stashed away somewhere, you’re definitely going to need a small business loan.

Basics of Small Business Loans

  • The Promissory Note. A lender will want you to sign a written promissory note, which is a paper that says, “I promise to pay you $X plus interest of X%.\" You want to have documentation of the loan\'s terms in case the IRS decides to audit your business.

  • Interest. As a general rule, a lender can charge you interest of up to 10% per year and not have to worry about violating any state usury laws. Make sure you know what your state’s laws are.

  • Security Interests. Many lenders will require you to put up valuable property as collateral that they can sell to collect their money if you don\'t pay off your loan.

  • Personal Liability. Depending on how your business is organized, if you don\'t make good on your repayment commitment, a lender has the right to sue you personally if your business is a sole proprietorship or general partnership. If the lender sues you, it can take your personal assets to satisfy the loan.

  • Cosigners, Guarantors and Personal Guarantees. A lender may also require that someone cosign or guarantee the loan. When asking someone to cosign or guarantee a promissory note, make sure they understand that they\'re risking their personal assets if you don\'t repay the loan. If you’ve organized your business as a limited liability entity, the lender might ask you to personally guarantee the loan. Because small businesses have high failure rates, lenders feel more comfortable if business owners have a personal stake in repaying the money.

How to Secure a Small Business Loan

Small business loans are often turned down because of risk factors more than anything else, so you must prepare yourself thoroughly before attempting to secure a small business loan.

The main requirements of attaining a small business loan are your personal credit history, business plan, experience, education and feasibility of the business you are creating.

The most important step to obtain a small business loan is to prepare a business plan. This needs to show the lender that providing you with a small business loan is a low-risk proposition. Your business plan must answer the following questions:

  • How much money do you need? If you are starting a business, this should be included at least in the start-up estimate. Request enough money to invest wisely.

  • What are you going to do with the money? You will have to provide the designated use of every dollar requested. A small business loan is often needed for: operations, assets or to pay off business debts.

  • When will you repay the small business loan? You will need to convince the lender (with documentation) that you are able to repay the loan through the expected long-term profitability of your business.

  • What will you do if you don\'t get the loan? Let lenders know that rejection will not discourage you from starting or growing your business. You want to appear confident and persistent.

If you don\'t get a business loan, don\'t get discouraged. Ask the lender why you didn\'t get the small business loan, and then learn from the answer, move on and try other lenders.

Benefits of Debt Consolidation

  • Lower Interest Rates
  • Lower Monthly Payments
  • Eliminate Debt in Less Time
Learn About Debt Consolidation