7 Ways To Improve Your Chances Of Getting A Small Business Loan

Some business’s live for a long time and never need any money from anyone. These companies are rare and eventually there comes a time in every small business when some kind of finance is required. Whether it is for expansion or to cover a cash-flow problem, eventually every business will need to get financial help at some point.

Financial help can come in many forms. Angel investors and friends and family are both popular sources of finance but both have drawbacks that should really make them a second port of call. The first port will probably be a bank loan. A loan from a bank has many benefits and for this reason many small business owners try to get help from the bank. But the banks are fussy, they have certain criteria and procedures that must be met in order to get your finance.

Below are 7 things you can do to make your chances of getting a small business loan much better.

1. Check your credit rating and if it is bad, make it better! It may take a little longer but you can improve your credit rating in a number of ways.

2. Keep your audited accounts up to date and have them on hand so you can refer to them if asked for info.

3. Update your business plan. If you don’t have one then you need to write one, even if you never intend to use it yourself.

4. Have a clear plan of action for the monies. The bank needs to know the risks. State exactly what you want the money for. What are you going to do with it?

5. Be prepared to talk figures. You will need to be able to discuss your business finances in great detail including next year’s profit and loss predictions.

6. Know what you want. You must understand that the banking institutions are in it for the money; they will look after themselves before they look after you. They may not offer you the best product for your business. Do your research before you enter the bank and check what other banks are offering.

7. Be sure that a loan is the right option. Loans are suitable for buying vehicles, buying property, etc. They are not really suitable for things like ongoing expenses and bills.

Remember that the banks want to lend you money; they don’t want to say no. If they say no then they aren’t making any money out of you but they still need to assess the risk and the best thing you can do is to paint a risk free picture by giving them as much info as possible.