Finding the means to fund your business can be one of the most difficult tasks you will take on. Lenders want to see that you have already built a successful business model, but how do you begin when you don’t know where the money is going to come from? There are many ways to acquire funding, and several different financing options are available, which may seem overwhelming. But here are some helpful tips on how to easily secure a business loan.
Create a Good Business Plan
Many business owners don’t prepare for their financing interview, making them appear less experienced to the banker. Also, many business owners underestimate how much money they need to borrow.
A business plan will help you set goals and define the future of your business. It also serves as a roadmap, guiding you through your business’s ups and downs. A well-written plan can provide financial security to you and your bank, benefiting both parties well.
Set Long-Term Goals
Before you talk to a banker about your business, take some time to organize the facts about your operation and make a convincing case for why you need a loan. You should be able to explain your plans for the future of your business. This means showing your banker exactly how you plan on growing your business. Be sure to talk about proven growth strategies and show your banker a realistic financial projection so he or she can better understand how you’ve accounted for risk.
Carry the Right Documents
When you’re ready to talk about your business plan, bring documentation of past performance: tax returns, bank statements, proof of insurance for both you and the business, and any documents that show the lawful creation of your corporation.
Be Ready to Discuss the Financials
Have a clear sense of your monthly expenses and income so that you can talk about them at meetings with your banker. It will help your banker understand the situation in your business. This also makes way for a conversation about how to handle slow times. Provide an estimate of your financial contributions. Banks want to know that you’re not a risk to the business, and they’ll find it easier to take you seriously if you’ve put your own money on the line as well.
