Our company may require an initial bank loan of less than $5000 to utilize as startup costs. We are a company based on a new concept with a hybrid business model that hasn't been quite done before in our particular industry. However, a main advantage of our model is that we require very little for startup costs, and our overhead is low (We are a services company, not a physical product producing or selling company). How difficult is it to convince a bank (either for-profit or credit union) to allow us to take out a small business loan if we presented them a well-established business plan? Do you think our rate of success in obtaining this will increase dramatically, since we may only require anywhere from $2000 to $4000? (For your info, we are an S Corporation)

This is going to be your first hurdle "hybrid business model that hasn't been quite done before in our particular industry." Bankers use industry benchmarks as part of their basis for reviewing loan applications, even small loans.

Second it appears you are still a 'young' company though you are an S-Corp. What is your D&B rating? It matters and if you don't have one or any substantial business credit established, that's going to trip you up also.

Finally, how are you going to repay the loan if this doesn't work as you plan? The SBA doesn't issue loans, they only guarantee the lender will be repaid if the borrower qualifies with the SBA first and defaults. You have to show this in your business plan or have money somewhere...just in case.

Before you ask for a loan, check with your banker. Will they give you a line of credit? It may not be the full amount you need at the moment, however over time as you use and repay the loan they will reconsider increasing your limit. Check this option first, the rates for the credit line may be lower than getting a straight loan.