Small Business Loan Tips

Early repayment penalties. Some banks charge a 2% to 5% penalty if you decide to repay the loan early. Repaying early can be a great way to reduce your costs, so if you're going to try to get ahead, make sure the contract allows it without penalty.

Start building relationships now. Personal relationships matter more than you might expect: a lender who knows and trusts you is much more likely to take a gamble on your small business loan. Take the time to talk to your primary business banker and get him or her on your side before you need a loan.

Avoid eating out. From pizza shops to gourmet bistros, restaurants come and go very quickly. Unless you have specific food industry experience, a great concept, and experienced staff lined up, you'll find it almost impossible to get a small business loan for a restaurant.

Don't pinch pennies. Saving every possible dime shouldn't be the emphasis of your search for the right loan. A small business loan that carries conditions you can live with from a vendor who will be on your side now and in the future is much more important than a small cost savings.