Getting a small business loan is no easy feat, but that doesn’t mean it’s impossible! Below are some of the basic first steps of getting through the approval process. While each company will have a slightly different experience and procedure, these are the basics. Following these will put an enterprise on the right track towards making their dreams a reality!
Many entrepreneurs have great business ideas that, when implemented, can build a successful empire in the future. But the major problem they face is how to get a small business loan to bring their ideas to reality. To increase your chance of getting a loan, do these things before applying.
1. Assess Your Business and Personal Cash Flow
Getting a small business loan can be less stressful when you have a good financial statement. Lenders will always check your financial statements before giving you the loan. One of the reasons for checking your financial statement is to know whether or not you have the ability to repay the loan when due. So, if you have poor profits or bad cash flow, you need to find a way to remedy the situation. Before applying for a loan, ask the following questions: What are the terms of the loan? And how much do I have to pay on a monthly basis? Now compare that with your cash flow to see if it’s a risk worth taking.
And if you have not been keeping records of your financial statements, it’s high time you started.
2. Clean Up Your Credit Report
Before you request a business loan, you need to first ask for a copy of your credit report and conduct a thorough review. Sometimes, your credit report might contain errors, and if you fail to clear up the mistakes on time, it might have a negative effect on your credit score. Keeping an eye on your credit reports, both business and personal, is essential. The tiniest errors such as a misspelled name or residential address might indicate future problems for you or even potential fraud.
If the error is from a creditor, contact the company personally and report the issue before going to the reporting agency. All in all, make sure you rectify any issues with your credit report promptly. Otherwise, no loan will be approved by your lender.
3. Prepare a Comprehensive Business Plan
No doubt, writing a business plan can be daunting and time-consuming, but it’s definitely worth the effort. A well-detailed business plan will help you secure the loan you seek. It offers you a chance to show what you’ve got in terms of skills and experience. Your business plan should include your business goals and objectives, market research, financial analysis, etc. Remember to state the areas the funds will be geared towards clearly. A great business plan can get you one step closer to securing a small business loan. Check out the Thinking Capital website if you want to learn more.
4. Increase Your Credit Score
Nowadays, every lender wants to be sure an applicant is eligible for a loan. If you’re applying for a small business loan, then you need to have a good credit score to stand a chance. A credit score of 700 and above is excellent. However, a credit score below 680 might make it difficult to get an approval for your loan request. If you have a low credit score, work towards raising the bar before applying for a small business loan.
Follow these steps to increase your chance of getting a business loan.
Starting a new business can be a scary process. Daunting and anxiety-inducing, putting you and your services out there can be the cause for headaches and more than a few sleepless nights. It doesn’t have to be, however. There exist tons of steps that can assist in creating, nurturing, and growing your business a significantly less stressful process.
The first and most immediate step in accomplishing this is understanding that hundreds of individuals have already found success, and have freely shared their process for all to enjoy. Taking advantage of this knowledge is the difference between a thriving startup and a broken dream. Regarding the financing part, there are plenty of lenders out there who will be willing to give you loans for your business.
One such tip comes by way of where it is you start your business. So many fledgling entrepreneurs, especially in the age of online retail, underestimate just how important location is overall. In the coming article, we have listed some insider tips regarding how you should make your location selection.
1. What Kind Of Business You Run Is A Crucial Factor
Often overlooked, understanding what your business truly is can yield great success when selecting your initial location.
This tip is often shrugged off as being overly obvious, but in a great stroke of irony, individuals who feel this way are often those most guilty of what it warns of. To ensure this isn’t you, let’s get into why this is so important.
A clear, actionable mission statement is just as important to a business’s success as the behind-the-scenes calculations, as any successful entrepreneur will tell you.
What is your end goal? Who are you trying to service? Why do you want to offer this service? Understanding these things will be guiding factors when selecting your startup location.
2. Where Is Your Demographic Located?
Next, are you located nearby your target demographic? Are the people who are going to be most interested in what your business offers in a nearby location? Acting on this factor involves a good deal of foresight.
You will need to have a solid grip of will be enjoying your services, and how much disposable income they have to spend at your establishment.
For example, if you’re selling used-technology, you can safely assume that you will be catering to those with limited disposable income.
If they had unlimited funds, why would they be buying used? You can act on this information by ensuring that your business is in a locale that is within walking distance of public transportation.
That’s just one example, and there are many other clever ways of maximizing opportunities in the same sort of way.
3. How Stiff Is the Competition?
If your business is near other centers of commerce, especially those offering similar services, then you are effectively cutting your profits in half. Get a grip on where your stiffest competition is, and position yourself accordingly.
4. How Visible Is Your Business?
Are your clients able to see your business? We mean this literally: Is your establishment in a clearly visible position where pedestrians and traffic can see your iconography and branding? It needs to be.
5. Is There Potential For Growth?
Finally, you should have a firm understanding of your growing options. If you have chosen a location in an economic decline, then you need to understand that correcting this will yield more in the long-term than it will cost in the short-term.
As a Canadian, you might be pretty excited about crossing the southern border and visiting the United States, no matter where you are going or whether or not it is your first trip to America. However, one thing that you might be worried about is the cost of the money exchange. As you might already know, some Canadians have lost a lot of money due to the currency exchange when changing their money over to American dollars, and you might be concerned that this is going to make your vacation that much more expensive. Luckily, there are a few ways that you can cut costs.
Visit Your Bank
First of all, don’t just exchange your currency just anywhere. Instead, consider visiting your own bank. In many cases, Canadian banks will offer more affordable currency exchange rates for customers who have accounts with them. This might not be the case with your own banking institution, but it’s worth looking into. Your banker might also be able to provide you with insight about where to go to exchange your money.
Buy What You Can at Home
Another tip is to buy what you can at home. You might be thinking about buying clothing for your trip once you arrive in the United States, but chances are good that you will spend a premium on them because of the exchange rate. Instead, consider buying what you can at home first and saving your money for travel expenses that you can’t avoid. Just make sure that you are mindful of what you can and can’t bring into the country; there are regulations in place about this, such as bringing cigarettes, alcohol or other similar items. This doesn’t necessarily mean that you can’t bring them, but you will want to do your research to make sure that you aren’t going over any limits.
Try to Calculate How Much You Need to Exchange Beforehand
In the past, you might not have minded exchanging a large amount of cash for your vacation and then exchanging any that you had leftover before returning home. This might not have been very costly in the past, but it can be a lot more expensive to do now. Instead, make sure that you only exchange what you need to exchange beforehand. Carefully calculating your expected expenses and sticking to a budget can help you with this and can save you money overall on your trip.
As you can see, there are a few different ways that you can save money on the currency exchange when traveling to the United States. If you follow these tips, you can help keep the cost of your trip down as much as possible. The Interchange Financial website is a useful source of information if you require additional insights.