A good business plan is a prerequisite for a start up business loan. The plan should include a listing of the assets and investments that have already been committed, a detailed budget covering projections of expenses and revenues for the first year of operation and a well researched survey of the current business climate that the business will operate in. In order to get a start up business loan a bank, credit union or other lender will want to be convinced that the business has a good chance to succeed in the marketplace.

The second element that is required for a bank to provide funding for a start up business loan is a well thought out business strategy and marketing plan. Even if the business concept is a great one, how does the new business plan to market its goods or services in order to bring customers or clients in the door? The marketing strategy does not have to be fully completed but an outline of marketing brochures or a proposed website will show the lenders that the business has a plan to succeed.

Finally, a bank or credit institution always likes to know that they are not the only investor in a business before providing a start up business loan. This includes the time and energy and money being provided by the business owner and if possible any other sources of investment, including contributions by family, friends, or other local business people. Banks want to see businesses succeed because that means more business for them but they dont like to be the only ones bring cash to the table.

Even with all of the above it may be difficult to arrange a start up business loan unless the personal finances of the owners or operators of the business are in good order. Banks also like to lend money to people and businesses that they know and trust before providing a start up business loan. Since there is little business background to check on for a new business they tend to rely on the financial creditworthiness of the individuals who are proposing the business. If there are any actions that can be taken to improve this situation before approaching a lender they should be done before meeting with the bank.

Many banks and lending institutions often ask for personal guarantees or collateral before granting a start up business loan so if possible these arrangements should also be made before applying for a start up business loan