Quote Originally Posted by prasaddvv View Post
Hi..

I want to start a small business. I have some capital for launching my business but i need some more capital for maintaining and running my business. I am thinking to go for a loan. Is this a good decision.
There are A LOT of legalized loan sharks out there for the unsuspecting small business owner. Be careful on some of those private lenders. Just my opinion... but I digress

Since you are a true start-up, but you have capital, I'd look into an SBA loan. Go to SBA.gov and find the banks in your area that write the most SBA loans. Some banks churn these things out like an assembly line. You're going to have a mountain of paperwork to assemble, and personal credit will be very important. Also you'll need to write a good looking business plan (see SBA.gov for guidance there). What you're looking for is probably a 7(a) loan - terms go up to 10 years and rates will typically be in the 5.5%-7% range, depending on the bank and your credit. The bank sets the interest rate, so don't let them tell you that the SBA sets it. The SBA just guarantees the great majority of the loan amount. They will require between 20-40% equity injection (cash) from you, before they give you any money from the loan. The bank also sets this percentage themselves, so shop around if they're asking for too much cash up front.

Good luck - what kind of business, if I may ask?