A step by step approach to a small business loan and keys to financing

As a business professional contemplating a small business loan, you may have one small hurdle to overcome that you never considered before: You probably come from a family that has an aversion to debt.

It’s a fact. Whether you’re a new Latino immigrant or a member of a Latino family that has been in the U.S. for generations, you have roots in a culture which teaches its children to buy things only when they have the money to pay for them. You or your family probably came to the U.S. with no history of using a bank for any purposes. Many never do use them, even after establishing themselves in the U.S.

According to an analysis by Market Advisers Hispanic families historically value financial freedom. Hispanic business owners do, too, and their businesses tend to stay small or grow slowly. They invest conservatively, and avoid undue risks.

It’s an admirable cultural trait, but you may have to get over it if you’re a Hispanic-American who has ambitions to start your own business today, or to expand and improve an existing business.

For a business owner—or really any American business owner–preparation is critical to obtaining the needed financing to get started, or to optimize cash flow later on.

We’ve identified vital financing steps for getting business financing when you need it.

Small Business Loans- Step By Step

1. Develop a solid business plan. Without a solid business plan, lenders and investors can’t see proof that customers would buy your product or service at a price high enough for your business to make a profit. Lenders will not only be looking at your cash flow and collateral. They’ll look at the viability of your business as well. For help creating your small business plan, check out this workshop by the nonprofit association SCORE.

2. Demonstrate that you have made a personal investment in your new business venture. Lenders like to see a commitment to a new business by the owner, and there’s no better way to show that than by making a personal financial investment in the business.

3. Prove that your business will produce a good profit in the short term. Include realistic forecasts with short-term, medium-term, and long-term financial forecasts. This establishes a benchmark for a small business loan.

4. Demonstrate your competitive edge. Your business plan should clearly detail how your product or service gives you a competitive edge over your rivals.