Even if you have the greatest business idea, a sure success plan and even the best team in the world, without a capital, your chance of owning the biggest business will only remain a dream. According to the SBA, starting companies usually experience more challenges during the small business loan application process. This may largely be because most small business owners are unaware of the application process and what they need to do. If you’re worried about this, you don’t have to feel that way anymore. Good thing we’re here to help you with five useful tips in securing business loans
1. The Right Lender
You can borrow the capital you need from all kinds of lenders like financial institutions, community lenders, credit unions, and alternative lenders. Depending on which one you choose, you can get a traditional bank loan with minimum requirements or receive direction from banks that know the local economic growth.
2. Get Your Homework Done
It’s a good idea to start working on your business plan and make it as solid and realistic as you can. Ensure that you have good credit scores and credit history. You might also want to secure strong assets—personal and business—to reassure the lender of your payback. This way, you’ll ensure a positive relationship with the lender you consult.
3. Fill the details
When creating your business plan, it’s important to be as detailed as possible. That way, you won’t have to scramble your brain when the lender asks you about it. When you present your business plan, make sure it includes:
- The reason you need the money and what you’ll use it for. Highlight the factors that make it more essential to your business.
- A detailed allocation of the money.
Plan out the specific areas for which you need the money. Be prepared with financial documentation and explanations to industry risk.
- The list of partners and suppliers you work with.
It’s not just you that they want to examine; they might want to check the credibility of the businesses that you’re spending the money with.
4. The Right Team
Lenders are also particular in examining your team. They may ask about:
- Your leadership: Do the executive members have good credit and business history?
- Your investors:Who are investing in your business, and how are your relationships?
- Your company’s equity:How are you personally invested in your company? How do you see it develop in the coming years?
5. Get Help
Even with these tips, securing a small business loan may still be tricky. Thankfully, you can get even more useful techniques from these resources. What’s the best part of it all? They’re free!
- SCORE: With its network of expert business mentors, SCORE can provide you with the right professional assistance to help you learn more about your business field and aim for success.
- Small Business Development Centers: Also known as SBDC’s, these centers offer free resources and even advice from experts and professionals in the field.
- SBA:Dedicated to help small business, this government agency can help you with any concern you have. It also has a network of women’s business centers to help out female entrepreneurs.
Remember, it’s important to take time. Make sure that your business plan is not only effective for you and your company but also for the lender as well. By being aware of the loan application process, you’ll be more prepared in finding the right lender, the strategies and techniques you can employ, and finding the right team to support your endeavor.
Based on Materials from All Business
Photo Sources: Flickr, Inc, Pixabay