How to get Business Loans
Getting a loan for your small business — either to start up or expand — is quite challenging for most business owners, since most lenders will require you to have financials that are solid for at least two to three years in order to lend you the money. That is one should have a good credit record, a good reputation and collateral that can secure your loan.
Planning is the most important aspect; that is, write down your business plan that you will present to the lender. It should consist of the reasons as to how much you require, why you need the loan, and on how you plan to use the cash. That is, is the loan intended to pay business debts, buying equipment, or marketing .
Present an accurate record about your finances that accurately describes both your assets and debts. This will help the lender to evaluate the risk and also have a clear financial picture of your business. Normally if your assets values are higher then you will be able to borrow more money, but always remember that you are viable to lose your assets thus do not overextend.
In order to be eligible to get credit for small businesses it’s important to build a foundation with your bank, first build a good credit history and this can be attained by buying things on credit and ensuring that you pay back the money. This will help you in your credit rating and thus you will obtain a perfect credit report. Generally, it is highly recommended that one should always have both personal and business credit though they are similar, but try to keep them separate for security purposes.
Keep a record of your old tax returns; this will give you a good income history, since if you are a perfect earner then you are certainly not going to make the lender vigilant. Convince the lender by giving him details on how the business funding will help your business and also let them know how you plan to repay them in a way that is profitable to them as well.
If you meet these requirements, including a good credit history, a solid business plan, and whether your business is expanding or starting, then you have no doubt that you will definitely convince a lender or bank to offer you business financing. If you want to start up a business, it is quite difficult to get approved for small business lending — especially for small business loans with bad credit– since you have no way to show that you are good in managing money. hence keep in mind that your assets will act as the security.