If you love working on cars, then perhaps you’ve dreamed of owning your own auto repair shop.
There are a lot of benefits to being a small business owner. You get to be your own boss, set your own schedule, and take pride in ownership.
That said, one of greatest barriers for many aspiring entrepreneurs is the need to apply for a small business loan.
Many folks are intimidated by the process, or fear they will be rejected due to poor credit or financial history.
The good news is that there’s no need to let the obstacle of applying for financing stop you from achieving the goal of owning your own auto repair shop.
With the right research, you can find the resources you need to get a small business loan, and make your dreams a reality.
Figure out what funding you need
The first step of applying for a small business loan is determining how much money you’ll need to get your business running.
While the average cost of starting a business can vary, the truth is that each business has unique funding needs. To determine how much you’ll need to open your auto repair shop, you’ll want to calculate your expenses.
Things like equipment, location rental, advertising, insurance, and utilities all figure in to the overhead cost of your business.
Remember, overhead costs are the costs you’ll incur upfront, before your business is profitable. For that reason you also must determine how much you can afford in a monthly loan payment while starting your business.
Choose a lender
Once you’ve decided how much financing you need to apply for, it’s time to find a lender. Not all lending institutions are created equal, so its important to understand the differences between them.
Banks and financial institutions
When it comes to borrowing money, may people think of banks first.
The main benefit of getting a small business loan through a bank is that you’ll likely have a lower interest rate.
On the other hand, banks have many regulations that can make getting a loan difficult for new business owners. For instance, most banks want to see 3 to 5 years of business experience before giving a loan.
Luckily for start-up companies, the government’s Small Business Administration (SBA) offers services that can connect borrowers with trusted lenders.
In this situation, the SBA guarantees your loan. This can help your application carry more clout than if your were applying on your own.
Special and alternative loans
Many aspiring business owners don’t realize that, depending on their location or demographic status, they might have access to special loan options.
For instance, many lenders have loans specifically for business owners of color, or female entrepreneurs.
Additionally, there can be different opportunities depending on the needs of the area you are applying for a loan in. Depending on what kind of business you’re opening, you might have an easier time finding small business loans Florida than in New York, or vice versa.
Make your dreams a reality
Securing a small business loan can be a daunting process. That said, the pride of having your own auto repair shop will make it worth it in the end.