The main reason that some people take opportunities when they arise, and others do not, is that some people are ready.
They have their business plan ready and all they need to do is take advantage of the opportunities.
Where can you find the right business plan?
If your business is based in the United States - click here
If your business is based in the U.K. - click here
Ideas To Action.
Part 16 - Small Business Loan.
Getting a business loan is a major hurdle facing small businesses, mainly due to tight lending standards by banks. But obtaining outside financing is often necessary to start or grow a business or cover day-to-day expenses, including payroll and inventory.
Although finding, applying for and getting approved for small business loans can be difficult, the more prepared you are, the better. Here’s how to get a business loan in five steps:
- Pinpoint why you need the money. Ask yourself how this loan will help your business.
- Find the right loan. Choose a type of business loan based on your needs.
- Find the best lender for you. Compare options based on the cost and terms of each loan.
- See if you have what it takes to qualify. Gather information including your credit score and annual revenue.
- Get your documents ready and apply. Know what documents lenders will need from you ahead of time.
1. Ask yourself, why do I need this loan?
Lenders will ask you this question, and your answer will likely fall into one of these four categories:
- To start your business.
- To manage day-to-day expenses.
- To grow your business.
- To have a safety cushion.
2. Decide which type of loan is right for you. - Your reasons for needing the loan will dictate the type of small business loan you get.
3. Determine the best type of small-business lender. - You can get small business loans from several places, including banks, nonprofit microlenders and online lenders. These lenders offer products including term loans, lines of credit and accounts receivable financing.
4. Find out if you qualify - Your place on the credit spectrum is one factor that will determine which loans you’ll qualify for. You can get your credit report for free from each of the three major credit bureaus - Equifax, Experian and transunion - once a year.
5. Now, gather your documents - Once you have compared your options, it is time to apply for the loans that fit your financing needs and that your business qualifies for.
Small Business Loan
Whether you are at the commencement of your venture, or after a healthy period of trading, there could probably come a time when financing will be wanted. A large number of SME owners are rejected when they apply for their first loan, even if they have assets to put up against a secured loan. Obtaining an unsecured loan is even tougher as you will have to demonstrate an excellent credit rating, have been running your company for a decent length of time (frequently at least a year), and enjoy a relatively high amount of earnings.
An unsecured business loan for a business will be considerably less difficult to get from an alternative finance provider rather than the main street branch of your bank. All the same, they will probably still need you to fill in a great deal of paperwork and take their time transferring funds.
If finance is essential for your company to be able to grow, then you may have to look for unsecured financing. You should take a close look at the amount of financing you anticipate you should require and the amount your new venture need to borrow, as you have to answer for every penny to a lender.
Reaching out to a lender by asking how much can you lend me? - will simply not work.
Financiers that extend unsecured business loans do not require your company to contribute any collateral to get the finance, but you will need to meet income and credit demands, and you will need to develop a sound business plan.
Unsecured business loans vary between $4,000 to over $400,000, contingent on the use, the size of your venture, and your credit rating. Many banks might choose to offer businesses a revolving line of unsecured credit that is backed by monthly accounts.
Unsecured business loans will invariably demand a higher rate of interest than a fully secured loan on account of the risks, therefore, you always pay more during the loan period than you have done for a secured loan of an equal amount. Higher rates of interest and a shorter loan period will mean the monthly loan payments will be much higher. Unquestionably, unsecured business loans are harder to obtain and you will need to provide a good business plan, have your accounts regularly checked by the financier and, if you or your company suffers from a mediocre or has no credit record, the investor will, practically always, not authorize your application.
A real alternative for a lot of new entrepreneurs is to seek a partially secured business loan, where part of the original loan is secured, and as repayments are made, this security gradually covers the balance.
Ideas To Action - next
A Great Business did not just happen - It was planned that way.