Securing a small business loan doesn’t have to be a hassle. But you do need to make sure you cover all bases when applying for one. Before you begin the process there are a few questions you be should be asking yourself.
How Much of a Loan Do You Need?
The first step is to determine exactly how much money you need to borrow. A lot of this depends on how far along you are with your business plans. If you are in the early stages of launching one, the loan should at least be enough to pay for all of your startup costs. For businesses that are already established, the best way to determine how much of a loan you need is to look at the reason your business needs the money. Your lender will want specific details about how you intend to spend any money they give you before they approve a loan.
When Will You Pay It Back?
The process also involves explaining to your lender not only how you’ll use the money, but when and how you’ll pay it back. To get to this point you will likely have to show projections of future cash flow and your business financial statements. This will show the lender that your business will be bringing in revenue that you can use to pay the loan back.
What Is Your Plan B?
There are no guarantees and life, and this applies to any small business loan. So part of the process is to consider what you are going to do if you find out getting a loan isn’t possible. One of the best ways to fix this situation is to ask the lender why they decided to turn you down. Based on their answers, you can reassess your business finances and determine what you can do to change that rejection into an acceptance the next time you apply.
If you have questions or concerns about qualifying for a small business loan, please make an appointment with the Navigate Firm. They will help you find the answers you are looking for.