6 Sure Ways to Get Small Business Loan in 2022

Are you a small business looking to get small business loan in 2022? Look no further. In this article, I will show you Ways to Get Small Business Loan easily.

You see, as a small business, you need proper funding to stay afloat. According to statistics, half of the new businesses last for five years, and only one-third of them last for ten years. Hence, the chances of you surviving as a small business are very slim.

Amongst other things, you have to take care of start-up costs as well as the running costs/expenses of the businesses. Also, you need money for the growth and expansion of your business.

Ways to Get Small Business Loan

However, the type of business that you operate will determine how much money you can get as small business loan. There are proven ways to get a small business loan that fits your business and that’s what I’m going to show you in this article.

Going through this article and taking the recommendations that I suggest here will help you to save time and money in your search for small business funding. Also, where you get funding for your business matters because if you get funding from the wrong source you and/or your business will have to pay for it dearly.

I put together this article to help you make the right choice about your source of business finance and the conditions attached to each source. So, let’s delve in!

Ways to Get Small Business Loan in 2022

6 sure ways to get small business loan in 2022 are:

  1. Loan Service Providers
  2. Government Loan Schemes
  3. Banks and Other Financial Institutions
  4. Angel Investors
  5. Friends and Family
  6. Crowdfunding

1. Loan Service Providers

One proven source of small business loans is loan service providers. Loan service providers are financial institutions targeted at helping people get loans for personal or business needs. They are set up to help businesses kick-off and/or grow. If you are looking for a loan to help you start or grow your business, using loan service providers is a great choice.

Thanks to technology and the internet, you can access a lot of loan service providers online with your phone and get credited within minutes.

Loan service providers do not ask for a lot of collateral or a lot of paperwork like banks do. In many cases, they give loans to small businesses without collateral or paper documentation.

With Loan service providers you can get loans for your business ranging from N10,000 to N1,000,000 with different interest rates and payback times.

Some of the the best mobile loan apps in Nigeria to get personal loans for your business are:

2. Government Loan Schemes

Government Loan Schemes are set up by the government at different levels to reduce unemployment amongst its populace. To help the economy of the country, people are encouraged to start their businesses through these schemes.

Most times, people who are poor, or have little finance but are interested in starting and growing a small business are the main target of government loan schemes.

For most government loan schemes and grants, the recipients do not have to pay back. Most government loan schemes come with special entrepreneurial training for the recipients or would-be recipients. At the end of the training, the recipients may be given money to help start and manage a business effectively.

While some government loan schemes are for people with a tertiary education certificate, others are not. Also, some require that the recipient owns a valid government issues ID like a Driver’s License, National ID card, National Passport, International Passport, and any other proof of nationality.

Government issues loans are provided by government (affiliated) institutions like the Bank of Industry (BoI), the Bank of Agriculture (BoA), and other governmental institutions.

This is one of the best ways to get small business loans in any country.

3. Banks and Other Financial Institutions

Most entrepreneurs do not okay with the idea of getting loans from banks and other financial institutions because it takes a lot of time, involves a lot of paperwork, has high-interest rates, and there’s a good chance that the loan won’t be approved after all.

This is why many people choose to use private loan service providers like the ones from loan service providers.

As a requirement, a business must be at least two years old before it can get a loan from a bank. Also, the business needs to be financially stable and have assets that can be used as collateral.

A loan from banks and mainstream financial institutions is purely an unsecured loan hence the recipient must have something that can be used as security aka collateral. This is to forestall the chances of the recipient not repaying the loan.

Getting a loan from banks and financial institutions is difficult without collateral. If you or your business has a good credit history and a guarantor who can defray debts if you can’t, you can get a loan via this means easily.

You can get loans from most of the banks in the world. The terms and conditions for each one are different. Many of them, on the other hand, have a different set of rules before they give out loans.

Make sure that the one you choose fits your needs.

Ways to Get Small Business Loan

4. Angel Investors

An “angel investor” is not in any way a physical angel but rather someone or a group of people who invest money in businesses, usually by buying a share of the company, like a stock. Angel investors are usually rich people who like to put money into new businesses, in exchange for a share of the profits from that business. This group of investors is called “angel investors.” Often, an angel investor has been successful in a certain field and is looking for more profitable businesses (in that field) to invest in.

Angel investors can give money, advice, and direction to help start and grow a business. They are a great way to get small business loans.

If you want to get a business loan from an angel investor, you have to show that your business has a good chance of growing. For this, you must have a good business plan which shows a good profit, scaling, and exit strategy. Besides, you must be able to convince angel investors that your business is viable and I worth investing resources on.

If you can’t get enough money from the bank or your own money, and you don’t have a rich family member to get business funding from, the next option could be an angel investor.

Like I hinted earlier, besides giving you money to help get your business off the ground, some only can angel investors are also willing to give you advice based on their personal or collective experience(s).

They can also use their contacts in a certain field to help your business grow quickly.

There are angels all around us. But finding and connecting with them could be a lot of work. This is because many angel investors want to stay out of the public eye. Hence, most times they consult other business owners or money experts to help them find new or struggling startups to invest in.

You may also locate angel investors online, at public/private events, through courtesy visits, and connections. Angel investors can be highly instrumental to starting and growing your business with ease.

5. Friends and Family

Friends and family can be a good source of business funding where you lack enough startup or running capital from personal savings, and you are unable to get funding from banks, and angel investors.

Banks don’t know you, so there is always that trust factor when it comes to leasing money to a stranger. However, since your friends and family know you, it’s usually easier and faster to get a loan from them for your small business.

Also, friends and family won’t check your credit score or ask you for assets or collateral before they give you a loan, and in some cases, they won’t ask you to pay back the leased sum.

It’s also likely that you won’t have to pay an interest rate on any loans you get from friends and family.

However, taking loans from friends and family can hurt your relationship if you take too long to pay back or if the project fails and you can’t pay back your debts.

So, you should meet with your friend or family and clarify the loan repayment terms before you obtain a loan from them.

6. Crowdfunding

Crowdfunding is one way sure, though a bit new way to get small business loan. This can be a good resort when getting a loan from banks and other standard finance intuitions, loan service providers, angel investors, or friends and family proves abortive.

Crowdfunding is the process of getting money from a lot of people for your business. To make this happen, you need to be able to get your crowd together and tell them about your business. Most of these are done via the internet.

Through the internet, you can talk about your business ideas and send copies of your business plan to as many people as you want.

This suggests that your business plan/proposal must be viable, profitable, and top-notch to make many people pick interest in investing in your business or idea.

You don’t have to know the audience personally. However, social credibility is a big and key thing when it comes to getting a small business loan via Crowdfunding. For this, you should ensure that your social media profiles are free of blemishes and questionable information. Once set, make your appeal or proposal on social media or a website like LinkedIn, Quora, or on standard Crowdfunding websites. Standard Crowdfunding websites you can use include Patreon, Indiegogo, StartEngine, SeedInvest Technology, GoFundMe, Mightycause, etc.

When people perceive your business as a viable one they would invest in it with the hope of getting back their money (as returns on investment) based on how well your business grows.

So, your business proposal needs to be clear and well-defined. Also, you need to show investors that you know the market you’re going into and have the skills needed to start a business and manage the business.

Conclusion

The process of getting a small business loan to start a new business or grow an existing one takes a lot of work. In business, the main goal is to make money, so every move you make should help you get there. In this article, I showed you different ways to get small business loan for your business. As you have seen, there are about 6 types of loan options that you can choose from.

However, it is important for you as a business owner or an entrepreneur to find out the terms and conditions, and how good a particular source of funding is to your business. Understand that how much you can get depends on the nature, maturity, and viability of your business.

Also, understand that the loan options you opt for your business can make or mar your business progress. So, be careful when choosing a source of funding for your business.

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