There are few things that are harder to do in the rough and harsh terrain of today’s modern marketplace than getting a small business off the ground. Even with all the knowledge and expertise in the world, some of the most promising startups fall flat on their faces.
One of the best ways to ensure that your small business is going to succeed is to be armed with all the knowledge and proficiency of your niche that you can get your hands on—and, of course, adequate funding.
But speaking of funding, where is one supposed to get the money they need to help their small business succeed? That’s where a small business loan comes into the picture!
Getting accepted for a small business loan is easier said than done, however. But if you come in adequately prepared before applying, you’re all the more likely to come out successful. Here are some tips to keep in mind to get your loan and do it right:
Research Business Loans and Determine the One You Need
There are different types of business loans available, and some are going to be better for your business than others. The options vary depending on the needs of your business, how long the loan will last, and the loan’s specific terms. Some options include a small business line of credit, accounts receivable financing, small business term loans, working capital loans, equipment loans, SBA small business loans, and small business credit cards, and more.
Do the necessary research and find the option that you think is most suited to your business. You may be steered in another direction while applying for your loan. However, you’ll at least understand the different types of loans available. This allows you to keep up with your potential lender’s terminology.
Anticipate How Your Credit and Risk Profile Will Be Viewed
You don’t want to go talk to your lender thinking that you have an unblemished record and outstanding credit, only to find you’re not in as good of standing as you’d thought you were. These factors are ultimately how lenders will make a call on whether to loan money to you.
The things that they consider will include credit score, outstanding loans, cash flow, your business’s assets, the amount of time your business has been operating, the company’s investors, and financial statements. Review these things carefully and take any remedial action you can.
Have Your Financial Statements in Order
Depending on the amount of money you are asking to borrow, your lender will need to review your accounting records and financial statements carefully. To make this process easier and more likely to turn out in your favor, gather everything you have in one, organized location. Make sure they are correct, complete, and thorough. This includes your income and loss statements, balance sheet, and cash flow statements. You will thank yourself for having these things in order when you are sitting across a desk from your potential lender.
Detail How Much You Want to Borrow and How You Will Use the Proceeds:
This is something that the lender will expect for you to detail for them. You want to go into this situation prepared with a bullet-proof answer. You’ll want to come up with the purpose of the loan and how it will improve your business. You’ll also need to be armed with your reasoning for believing why such an investment in your business will see a great return. This proves to the lender that you will be able to pay that loan back.
In addition, determine a precise figure of how much you’ll need to borrow to make this a reality. You may even want to be prepared to break that number down further and detail where each portion of that loan is going. Whether you will be using this loan for equipment, hiring, expansion, or anything else, your lender is probably going to want to know the details of the situation before they approve you to borrow any money.
Update Your Online Postings and Profile:
Most lenders aren’t simply going to go off of what you tell them about their business—they are likely to do their own research on you as well. This will likely include reviewing the information about your small business available online, as well as any information on its principal owner. By reviewing this information for yourself, you can make any deletions or changes as necessary.
Some of the things you’ll want to ensure during this review is that your business’s website looks professional and it’s up-to-date, has a respectable presence on LinkedIn, Twitter, Facebook, and other relevant or prominent social media websites. You’d also do well to review the Yelp reviews your business has received.
By preparing yourself adequately for the application, and by taking the above-listed considerations into account, you will be in a much better position to secure your capital. Hope you’ve enjoyed our tips to getting a small business loan. Apply for yours today to give your business the leg up it needs to reach its full potential!
Checking for pre-approval will not affect your credit score.