You can crack one of the world’s undiscovered niches, have ground-breaking brainwaves around branding and a ready-made team of staff waiting in their starting blocks, ready to jump into action as soon as they get the green light.
However, without the right funding, making a success of your entrepreneurial ambition is pretty much impossible.
The sad fact of the matter is that we need money in order to make the world go around – or at least, in order to keep the business world turning. Some people source this through the sale of a previous business, inheritance or just a lucky stroke of investment from a keen lender along the way. For others, it’s not always quite so simple.
If you’re struggling to get your business off the ground or feel like you have hit a wall in the development of your venture, a cash injection might be what you need to break the next level. One of the most popular ways of sourcing this extra finance is through securing a business loan.
The business loan application process can seem intimidating and complicated, especially for those running a small business or looking to launch their first start-up.
With this in mind, we’ve put together some basic tips on how to apply for a business loan.
What is your own credit rating like?
The first thing you need to do is check your own credit score. A late personal payment is enough to damage your chances of having a business loan application accepted, especially for SMEs and start-ups.
Make sure your books are in good shape
It goes without saying that your financial records and accounts need to be meticulously organised when going through the loan application process.
If this is something you struggle with, consider seeking out the guidance of a qualified professional or implementing a free accounting software like Pandle.
Be honest with yourself and potential lenders
These days, most of your credit information and company finance details can be found online so there really is no point lying to lenders who will run their own checks anyway.
It’s also crucial that you are transparent about what you can realistically afford in terms of interest and repayment instalments.
Make sure you meet face-to-face
Questions are more easily answered and conversations are more seamlessly conducted if you aren’t waiting days in between each email reply or phone call.
Set up a face-to-face meeting and get a feel for potential lenders to best decide which is the right one for you.
Don’t forget to read the small print!
It’s easy to become blinded by excitement or relief when you are offered a loan but don’t forget to go through any contracts, agreements or legal documents with a fine-tooth comb. If interest rates seem too good to be true, it’s most probably because they are!