Posted by admin on December 14, 2012
You may want to start up your own business and might be in need of some sort of investor funds or a loan. This can be one of the most challenging tasks for a small business owner to deal with.
You may utilize your own business savings to set up your business or borrow some money from your friends or family. But that won’t be enough at times.
You will have to enter the business finance arena to get a small business loan.
Here are a few important and helpful steps to follow that can reduce the complexities of getting your required finance. You should also be aware of other business options and financial products and alternatives in order to seal the loan offer.
Banks often think that it will be a risky move to offer business loans to small business owners, so you should always keep all your options open.
Whenever you apply for a loan from a bank, it is very important keep the following points in mind.
Credit history : Your personal credit history has to be a in a very good standing in order to get approved for the business loan. If there is any negative remark on your credit history, then you should first work on improving it before applying for the business loan.
Amount of the loan : Next you have to figure out an approximate amount of the loan required. You have to calculate the amount required for inventory, payroll, manufacturing expenses, supplies, real estate and miscellaneous assets. You must do a proper estimate so that you can invest your money wisely.
Good Business Plan : Make a very good business plan before applying for the loan. The bank will want to know more details about your business, how much helpful your business is in that area. You should have all the answers to their questions to increase your chances of getting approved. If you are not sure about how to make a good business plan, you can consult with a planner or an accountant.
The Profitability Of Your Business : You have to create a very good impression about your business in front of the loan company and discuss about its profitability. You also need to assure the loan officer that you will be repaying the loan in a timely manner. For this you can show your forecasted financial statements to make your point strong.
What if you don’t get approved for the loan? : This is the last question a lender will want to ask you just to read your mind. Always be well prepared to have the right kind of answer for this question. Let your lender know it very nicely that their bank is not the only place who will loan them the amount. You will try other lenders and programs that will fulfill your requirements.
You may not get approved for the loan in the very first attempt. Be confident and optimistic and you will find someone who will grant you the loan.