I read an article today from a SCORE counselor who said part of your loan request must be a “passionate explanation” of why you need the money. I disagree. Passion has no place in a business loan application.
Let me explain by giving you a common example in teaching. A student comes to me and says, “You have to pass me in this class because I need the grade. I have a scholarship that I will lose /or / If I don’t pass I won’t be able to continue in school / or / I want to get a good job and I need good grades to do t hat.”
Not my problem. The fact that you need something does not automatically entitle you to get it. The fact that you “need” this loan doesn’t mean the lender has to break the rules to give it to you. The mere fact of need is not enough to get a loan to start a business.
You certainly must have determination, but going to bank after bank with the same needy attitude isn’t going to help unless you listen to the reasons why you are being turned down. If you continue to express your need and you don’t take positive steps to get a co-signer or find some capital or free up some collateral, you’re wasting your time.
You may have heard the saying, “Your emergency does not constitute for me a sense of urgency.” If you want a small business loan:
- Put together a great business plan that shows exactly how much you need and how you will pay back the loan
- Show that you know what’s needed by getting your personal finances in order
- Find money to put into the venture, through personal savings, a co-signer, or other funds.
- Answer the tough questions and do whatever your lender wants.
Save the impassioned pleas for marriage proposals and act like a real business person when you are giving a business proposal.
By the way, I did agree with the rest of what this SCORE counselor said. You might want to check out his article on the SCORE website.
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