6 Things You need to Know to get Your Business Loan
Are you worried you might not get finance for your start up business? It is certainly more difficult to get a business loan as the financial crisis hits different parts of the world at different times and in different ways but money is still available for small businesses as long as you do some research
If you want to launch a new product, expand an existing business, or help finance your start up business, know these 6 things:
1. Get some detailed information
Before you go into applying and spending a lot of time working your way through the often extensive paperwork, contact your nearest small business development centre. They have an extensive range of information and can help you identify what you need to take to a lender
2. Prepare Your Paperwork
All financial institutions want to see your business plan and financial records. If you are a start up business, do a budget and cash flow analysis. Show that you have a good understanding of your business and market, a high-level strategy, and a financial projection
3. Personal Finances are part of it
Your past credit performance will matter so be prepared to present your personal finances in detail. Pay off any credit cards and personal loans so your overall commitment is down.
4. Look for alternative Financial Institutions
There are many ways of getting your business loan with a multitude of financial institutions, credit unions and building societies in place. Seeing a finance broker might be a good idea as they have a range of deals on hand for your you to choose from
5. Will a line of Credit help?
Depending on what you want to use the business loan for, a line of credit might be a better approach for you. With a loan, you get a lump sum from the bank, usually for a specific purpose such as opening a new store or expanding an existing one while a line of credit allows for ongoing, smaller expansion but might be easier to set up for you
6. Don’t wait till you absolutely need it
Pay close attention to your projections so that you’ll know ahead of time if you’re going to need some extra cash. It’s no good waiting till the last minute because if you’re out of money, the bank may say you can’t service a loan.
Many small business owners wait too long. Often small businesses that fail are profitable when they fail, they just don’t have the cash flow to survive. So get in early, prepare your financial records and use a business loan to get you started or take you to the next level