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 how to get approved for small business business loans, it's really important 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 application or not.
Here are eight of the best thing to get
1. Business Plan
Having a thorough, easily interpretable business plan that you and your potential funder can read is vital. It can speak volumes about your business and is one of the best ways, along with strong 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.
2. Seek Advice
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 with respects to finding the right lender.
3. Beef Up Your Personal Credit Score
Very important! A solid credit score is a key 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 have a detrimental effect on your application chances. There are a few things you can do to improve your credit score...
- Purchase credit cards, use them and pay it off immediately
- Fix errors on your credit report
- Pay future bills on time
- Lower current loan/credit card debt
4. Start Networking On And Offline
Networking isn't for everyone, but, done right, it can be a very effective method of growing your 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.
5. Set Yourself A Budget And Shop Around!
There are so many options for you when it comes to financing your 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 important when considering your loan, make sure to take a step back and look at what else the firm you're choosing is offering.
6. Save Up Your Personal Capital
Having working capital saved up, ready to use, is a great indicator for a lender when considering your loan application. Also, it's just good practice to have capital saved up when getting your start-up going.
7. Show Your Industry And Management Experience
Got prior experience? Show it off! If your past experience is good, it's a great indicator, to a lender, of your potential success as a business owner. Three to five years experience is an ideal amount of experience to have. On a more general level, it looks good if you have business management experience, i.e. hiring employees, accounting and marketing.
8. Begin Building Your Start-Ups Credit Score
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...
- Get your licenses/permits in order
- Get a business credit card
- Work out the suppliers that report to business credit bureaus
- Open up a separate business checking account
- Get a D-U-N-S number from Dun & Bradstreet to establish a business credit file
How To Get A Start-Up Business Loan | Some Other Useful Reading
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- Upgrade Your Assets Now To Improve Your Business Productivity
- 5 Tips To Consider When Funding Your Business Through Finance
Get In Touch!
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, in order to give the best chance of securing the fund that sends your business into the stratosphere! If you have any more questions, feel free to drop us a line.