Hundreds of thousands of entrepreneurs apply for instant business loans every year.
Sadly, not everyone gets the cash they require to start or grow their business.
When looking at getting approved for small business start-up loans, it's crucial that you're clued up on the best ways to optimise your application.
People sometimes miss important things or make silly mistakes that may seem small but can be the difference between a successful and unsuccessful application.
Here are eight tips to get you started:
Have a thorough, easily interpretable business plan that you and your potential funder can read. It can speak volumes about your business and is one of the best ways, along with solid accounts, of securing the business loan that you're after. In one document, you're able to outline the objectives, aims and the current state of your start-up.
When constructing your business plan, be careful and pay particular attention to the financial aspect of the plan. Our top tip is to have your financials looked at by an account before presenting it to a funder - they'll be able to help point out aspects of your financials that you might not have seen.
In your local area, there are bound to be experienced investors who have a wealth of experience when it comes to securing business loans/investments. Their knowledge of the industry is priceless; they will be able to point you in the right direction concerning finding the right lender.
Very important! A solid credit score is a crucial indicator for a finance broker when they're deciding whether or not to loan money to you. In addition, a good credit score can increase your chance of getting better rates and terms with those loans.
If you have a bad credit score, it can negatively affect your application chances. There are a few things you can do to improve your credit score...
Networking isn't for everyone, but, done right, it can be a very effective method of growing your small business. Going to networking events, reaching outline through Linkedin, just being present in your particular circles goes a long way to getting funding.
Networking has so much value in it for you and your business - surround yourself with successful people and watch your business grow.
There are so many options for you when it comes to financing your small business; there is real value in spending a few weeks shopping around and finding a company, a loan set up and rates that suit your business.
As well as shopping around, set yourself a strict budget before going into negotiations. Remember to keep that in mind; otherwise, you could find yourself spending more than you wanted to. Whilst rates are essential when considering your loan, make sure to take a step back and look at what else the firm you're choosing is offering.
Having working capital saved up and ready to use is an excellent indicator for a lender when considering your loan application. Also, it's just good practice to have money saved up when getting your start-up going.
Got prior experience? Show it off! If your experience is good, it's a great indicator, to a lender, of your potential success as a business owner. Three to five years of experience is an ideal amount of knowledge to have. On a more general level, it looks good if you have business management experience, i.e. hiring employees, accounting, and marketing.
Once your start-up is up and running, you can (and should) start building your business's credit score. Below are a few quick tips for building up a beefy business credit score...
We hope these tips on how to get a start-up business loan have given you an idea of the sorts of things you need to be done before applying for a business loan to provide the best chance of securing the fund that sends your business into the stratosphere! If you have any more questions, please drop us a line.
