You might be mulling on getting a business startup loan that can help you turn your idea into a money-making machine. After checking out potential lenders, be sure to remember the following tips to up your chances of approval:
Summary Of Your Business Plan
When you apply for a business startup loan, the bank (or other lenders) only cares about one thing — that you can pay them back. While you need a detailed business plan, you should also have an outline of it that will highlight who your management team will be, information about your core business, market opportunity, your growth strategy, and an exit strategy.
While most go for lean startups, you still need to prepare a thorough business plan especially if you are seeking funding from a bank.
When you pitch a loan to a lender, it will be best if you can tell them when you can pay them back. Present how profitable your business could be and how a good cash flow can help you repay them as scheduled. Just be honest about your plans as they can also see if you are just bluffing.
Before seeking any loan, it will be ideal to have your personal finances in order. If you have a bad credit score, it will be better for you and for your business if you do something about it first. A good credit will ensure that you get competitive interest rates and it ups the confidence of the bank to trust you with their money.
Paperwork, Contracts, And The Works
If you have operated for a while before seeking a business startup loan, it will be best to show your financials and highlight your profits. Don’t worry if there are losses as there are other factors to consider when the bank does the math.
In case you already have contracts with customers, bring them. This will help you show the lender that there are people spending their money for your products or services. These contracts show that revenue is coming in and that you have a good future ahead of you.
Aside from these documents, make sure you have a resume ready, bank statements, and business plan.
Check Out Other Options
While banks might be the first funding source to cross your mind, remember there are other options you can explore. You can ask help from family or friends, venture capitalists, angel investors, p2p lenders, among others. Banks tend to be very strict when it comes to business loans so alternative sources are perfect especially if you have a far from ideal credit score at the moment.
Get The Lender Excited
When you pitch for a loan in front of potential lenders, make sure to keep it short and sweet. Answer the basic questions about the problem your product or service will solve. Get the lenders excited with a good demo of whatever you have and have a printed outline of your pitch highlighting the main details of your business.
Be ready to convince lenders that you have a market for your products or services. Do not just tell them about your market segment but show them how you know this market well and why you know these potential customers are willing to spend their money on your business.
To learn more about startup business loans, visit startupbusinessloans.co.
Are you looking for small business startup loans but don’t know where to start? If you are looking for tips, quick guides and reviews of the best lenders today, check out startupbusinessloans.co.