Are you ready to start a new business? You’ve got an idea, a business plan, and are set to start, the only thing missing is financing. Perhaps you’ve asked your bank and they’re unwilling to help. And maybe your friends and family aren’t in a financial position to lend you money. This is a common situation, and question, many new business owners face — where do I get the money?
However, you shouldn’t give up on your idea and maybe it’s time to consider a different avenue. Have you ever thought about a small business loan or business financing? A small business loan, which is usually given to startups or small franchises, is a small loan from a financing company who wants to help you get your business up and running.
If you’re interested in getting a small business loan, consider the suggestions below to help get you ready to meet with a lender.
1. Get Your Credit Reports in Order
Like banks, financing companies are going to want to see your credit report. Before approaching any financing company, get your reports in order. Start by ordering and reading your credit report. Find out your credit score, and review it to see if it’s in good standing. Some financing companies prefer certain reports. If you want, you can always call ahead and ask the financing company what they will need and what they will be evaluating. Sometimes companies will ask for more than one report. In this case, the company is being proactive as they understand credit bureaus do not always provide updated credit reports.
2. Review Your Report Carefully
Once you have your credit report or reports you need, review them carefully to make sure there are no errors. If you find errors, work with the agency who provided you with the report to correct them. Once the error has been corrected, your credit rating should improve. Making the changes now will improve your chances for getting a loan and you won’t be stuck explaining the errors to the financing company or cause unnecessary concern.
3. Review Your Business Plan
With anything in life, if you want to succeed you need a plan. Before approaching your desired lender, review your business plan and ensure it is a strong plan with a clear idea and explains how you will repay the lender. A good business plan includes logical and practical goals with a roadmap of how you are going to succeed. In the plan, you can also include a business and market analysis to show you are aware of the business landscape you want to enter.
4. Make Sure You Explain The ‘Why’
When you’re reviewing your business plan make sure you clearly explain ‘why’ you want the money. When describing why you need the money also explain ‘how’ you’re going to spend the money. You want the lender to feel confident in your plan and ability to repay them. When lenders feel that you have a strong business plan, and repayment method with a clear understanding of how you’re going to spend the money, they will be more willing to give you financing.
5. Ask for Help to Get Your Plan in Order
If you’re unsure about your business plan, ask a friend who’s in a similar industry or perhaps seek out advice from someone in your community for help. You want to put your best foot forward, especially if you’re credit rating is not up to par. These are just a couple suggestions to help guide you towards making your business dream a reality. Just because a bank said ‘no’ doesn’t mean it’s not going to happen, maybe it’s time to take a different route, like a financing company.