Most business owners find that they need a business loan at some point (or several points), in the lifecycle of their business. Whether you need money to startup your business or you need additional working capital to grow your business there are certain tips that can help to make getting a business loan a lot easier and improve the chances that you will walk away with it. While it is impossible to control every aspect of the loan application process there are things that you can do that will help to put you and your business in the best possible light. Here are some tips for getting a business loan:
• Do your homework. The world of lending is much more complicated then it was even a few years ago. Business owners who are successful in obtaining a loan will have taken the time to do the right amount of research before they even begin the business loan application process. Keep in mind that you should find out what type of business loan that you want, who offers that type of business loan, and what you will need to do to get it. When you take the time to do this kind of research it can make the entire business loan application process go much smoother.
• Have stellar credit. One of the first things that you should do when you are starting the process is to pull your credit reports for both your personal credit and your business credit. In today’s lending market there is little chance that you will get a business loan unless you can show that you have stellar credit. You should also keep in mind that you will need to go over every little bit of your credit report and make sure that it is accurate. If you find inaccuracies or mistakes you will need to correct them which can be a time consuming process. Finally, don’t overlook pulling your own personal credit history. Part of determining what risk you pose will be how well you manage your own money. If the lender is worried that you can’t manage your own credit most likely they will be reluctant to give you a business loan.
• Have a great business plan. An essential part of the business loan application process is having a great business plan. You want to be able to show your lender that you have a clear and complete understanding of your business and its market. Your business plan will tell your lender what you are going to do with the loan and most importantly to the lender, how you will pay it back. Business owners should not underestimate the importance of their business plan. You want your business plan to accurately reflect the strength of your business and your management. If you feel unsure as to how to write a business plan there are many sites online that can guide you or you can seek help from your attorney or other financial professional.
• Have the numbers. A potential lender will not be impressed by a business plan that only contains vague numbers or guess work. You will need to show in your business plan that you have taken the time to do the math. Your business plan will need to be backed up a detailed financial history for your business. You will also need to be able to show with the numbers that the business loan you are applying for will help to grow your business and give it the potential to pay the loan back. If you don’t have the numbers to back up your business plan there is little chance that you will walk away with the business loan.