Tennessee is a leader in the entrepreneurial realm. There are almost 500,000 small businesses throughout this gorgeous state, with most of those located in the Nashville area. Out of the 500,000 small businesses in the state, 350,000 of them are working without the help of employees or staff. Because of the staggering number of brand new companies emerging each year in Tennessee, it’s no wonder that there are so many banks offering business loans to entrepreneurs. The business loan application and approval process is extensive, but it can provide you with a large lump sum of cash you’ll need to keep your company running to the best of its ability.
Why Your Tennessee Business Needs a Loan
There are multiple reasons for why you might be interested in taking out a loan for your company. Some entrepreneurs find that a loan helps to keep their business afloat during trying times. The lump sum of money can be used to pay off debts, get rid of creditors and generally keep clients happy. Others use their loan funds to improve an already-successful business or to obtain the money needed to relocate. You may want to expand on your company but don’t have the money to do so, but with a good-quality loan, you’ll finally have the chance to realize your company’s potential.
With any business loan, you need a clear objective for using the money before applying for it from a bank. If you’re going to be taking out a loan for $20,000, you should have a plan for where every dollar of that $20,000 will be going. This prevents the money from being spent on frivolous expenditures that do nothing for the growth of your company.
How to Apply for a Loan
Once you’ve decided that a Tennessee business loan is right for you, you’ll want to apply for one through a trusted bank. First and foremost, you need to know your credit score before applying for anything. While business loans are not as strict on owners’ credit scores as other monetary options, you still need a good FICO score to be approved at a reasonable rate. If you don’t have a good credit score, the bank can either deny your loan or require additional collateral to protect themselves if the loan should go unpaid.
The business loan application requires a variety of information and documentation concerning your company’s capital. The bank wants to know that you’re a relatively successful company and that you’ll be able to pay back the loan installments each month without the risk of becoming delinquent. You will need to present data explaining expenditures, bills, outstanding debts, credit card statements and receipts all pertaining to your business before you can be approved. You can expect to be receive approval of your business loan within 45 days of applying.
How to Repay the Loan
Repaying the loan is similar to any other borrowed money you’ve dealt with in the past. You’ll be setup with monthly installments that must be paid on time to prevent late fees being added. Business owners find that automatic payment withdrawal is the best option for them as it prevents them from forgetting to pay their bills and falling behind as a result. Banks allow you to pay by mail, phone or online by creating a secure account on their website. Typical business loans will need to be paid back within 10 to 15 years, but you can reduce your term length by refinancing.
How to Find the Best Rate
To find the best rate, you’ll need to do some serious comparison shopping before applying for a loan. If you have a good or excellent score, you can be picky as to which lender you choose to go with. For business owners with bad credit scores or on the brink of company collapse, you’ll probably only have a few choices available to you at any given time. Visit several banks throughout Tennessee or go onto their website to get a free loan quote before signing along the dotted line and getting locked into a contract.
A typical business loan has a rate of three percent and anything higher than this would just add to your monthly bill. You can choose between a fixed and adjustable rate according to your needs and the changing market. Many have found that fixed rates are the best option because they don’t have to worry about their interest rate changing depending on the economy.
Banks in Tennessee Offering Business Loans
Below is a list of reputable banks in Tennessee offering business loans to entrepreneurs:
- First Citizens National Bank
- First Bank of Tennessee
- Bank of Perry County
- Jefferson Federal Bank
- Peoples Bank
- Andrew Johnson Bank