Considerations before getting a Business Loan

Planning to start a small Business is great. However, the idea of needing a capital when starting a Small Business is way too complicated. The first thing we consider to give a start-up is a Business Loan, but beforehand we need to be clear with our plans because you must present this well to the lender, otherwise you will end up with empty pocket.

Lenders have the same expectations to all Business hopefuls, whether this lender is a friend or a banking institution. For us to successfully convince the lender to fuel our business startup, we need to meet those expectations.

How to increase our chance of securing a small business loan? First thing you should do is to put yourself on the lender’s shoes. If someone asked you for a business loan, these two questions would probably pop out of your head.

1. What is the reason why you wanted the money?

2. What are the chances that you could repay me in FULL and in DUE TIME?

Now, switch yourself as a borrower and answer those questions.

Of course you can only answer those questions if you have prepared enough. You should have the business plan and the cash flow projections so that you can assure the lender that the money will go to a valuable plan and that you could repay him in full and in Due time. The key element is PREPARATION. You need to take extra effort to gather the documents and let these documents to the talking in persuading the lender. You have to assure the lender that you are a good risk.

No comments: