Planning

• Securing a small business loan requires proving to the bank that the business is a good investment. This is done by creating a detailed business plan that can show, step-by-step, how the business will work, how it will make money, current profits, prospective profits and more.
  
  

Collateral

• The bank may also require collateral. Collateral means a person gives the bank the right to take something of value from him if he becomes unable to repay the loan. This could be a house, car, boat or other valuable item that could be sold to make up the difference.
  
  

Co-Signing

• The applicant must have good credit to secure a loan. If the applicant doesn't have good credit, the bank will ask for someone to co-sign the loan if it is approved. A co-signer is someone with good credit who will be held partially responsible if the loan is not repaid.
  
  

Loan Application

• A loan application must be filled out before the loan will be considered. The application will ask about the borrower's assets and how much money she makes per year. It will also ask how much money she would like to borrow. The applicant should make sure that this figure is realistic and that she will be able to pay it back.
  The application may also ask the borrower to list how the loan will be used. So it is important to plan, in detail, what will be done with the money to provide for the business.