5 Tips to Help You Secure a Business Loan
A business loan can open up so many opportunities for your company to grow. Obtaining the loan can be difficult, though, especially if your business is new. Here are five tips to help you secure a loan for your business as quickly and easily as possible:
1. Keep all your documents in order
Organization is the key to securing a business loan efficiently. Your prospective lender will ask for your past accounting and tax records to make sure that your business is in good standing and that you’re a credible borrower. Consider hiring an accountant or bookkeeper to help with your business finances, or be meticulous with your record-keeping if you’re handling it on your own.
2. Show proof of cash flow
Your lender needs to know that your business will be able to repay the loan, so showing proof of cash flow is key. If your business is too new to show enough current cash flow, you should have a detailed statement of your financial projections for the future. Anything you can do to make the lender feel confident that you’ll repay your debt will help your chances of approval.
3. Know what type of loan you’re looking for
There are several types of loans that your business can apply for, and researching them in advance can save you a considerable amount of time. A Small Business Administration (SBA) loan could be the right choice for your company, but getting approved for this loan can take a long time. Another line of credit might be a better and faster option for your business, but you won’t know until you do your research.
4. Be able to explain how you’ll spend the proceeds
Your lender will ask you how you’ll use the money, so you should be prepared to give a detailed financial plan. The loan should help your business grow and generate more revenue in the future, and you need to have a strong rationale for your plan for the money.
5. Pay attention to your online presence
Most lenders research businesses online before approving a loan. You can improve your odds of approval by strengthening your online presence. Your business should have an updated website and social media profiles that show off your newest ventures and successes, and your personal online presence should be clean and impressive as well.
Have questions? Speak to an expert for more information.