SmallBusinessNewz

The Better Business Bureau is offering advice to small business owners on increasing their chances of getting a small business loan.

The BBB recommends developing a solid business plan to earn the ban's trust and increase the chances of landing a loan.

According to a recent survey by the Federal Reserve, small business owners are still having a hard time getting loans. Only 2 percent of banks surveyed had relaxed their standards for making commercial and industrial loans which was equal to the number of banks that had tightened their standards further.

"Any steps you can take to make your loan seem less risky will ease the bank's fears about lending to you and increase your chances of getting financing," said Alison Southwick, BBB spokesperson.

"This includes creating a comprehensive business plan and devising a solid strategy to pay the bank back."

The BBB recommends talking to the U.S. Small Business Administration (SBA) or its free counseling partners. Studies show that talking to a counselor or lender relations specialist can help increase your chances of getting a small business loan.  The SBA has lender relations specialists who work at field offices in every state.  The SBA's partners can also help.  They include about 900 Small Business Development Centers at colleges and universities, about 100 Women's Business Centers and a network of about 10,000 retired executives (called SCORE) who mentor entrepreneurs and small business owners.   Generally, all of these counseling and training services are free.

Lenders will take into consideration personal credit history and if the report has errors it could affect the chances of getting a loan. Free credit report information is available at annualcreditreport.com.

Other tips from the BBB include:

*Show that you're personally invested. If you have money invested in your own business, it will show the lender that you are personally dedicated to the success of the venture. 

*Plan to pay it back.  Banks are in the business of making money. To that end, they want to know that you have a solid plan for paying back the loan and can also provide enough collateral to cover the loan if the business fails.

*Start with who you know. If you already have a good relationship with your personal bank, start your search there. Ideally, your lender also works with the SBA-which will widen your loan options. Don't rule out the possibility of getting a loan from a smaller local bank.