You have the ideas, the motivation and even the business plan. You have all the recipes for the making of an awesome and profitable business venture. Everything’s all figured out except at this point, you need money as your startup capital, right? Getting business loans from banks can be easy or tough – it just depends on how prepared you are.
To prove to banks that you are worthy of credit, get started on your business plan right away and prepare some major documents. To be approved for a business loan, one’s personal credit history is very important. This is especially true if your business doesn’t yet have a credit history yet. If your personal credit history is impressive, it reflects on the would be credit history of your business as a separate entity from you. Also be sure to have your financial statements updated. It’s better to be ready and have necessary documents handy before you’re even asked to bring them. Financial statements show the financial health and stability of your business. If you’re able to plan and spell out everything, banks will most probably reward your business loan. Include as much detail in your business plan as much as possible so banks will know how exactly you plan to run your business. You can include information about you, your partners, track record, experiences, strategies, and more.
It’s now time to walk in and ask for money after you prepare your documentation. Since you’ll have to provide all of your personal and business information, you might as well share it to someone that already has it. Begin applying from companies that you already do business with. As long as you have a clean record with your bank and a long good track of financial behavior, banks will be more likely to approve the applications of those that has a proven track record. The biggest risk that banks think about is the uncertainty of repayment. If you have the record and the position to reduce or even eliminate this risk, you’re placed in a better position. If you have mortgage with a bank, then that’s certainly a good place to start looking for a business loan.
If you can’t or don’t want to use your existing contacts, go to a bank that wants to do business with you. Other smaller or even rural banks actively look for startups that they can do business with. Moreover, the entire loan process may be easier with them.
There are also credit unions that you can go to. Because these institution are not as highly structured like those in bigger companies, you might even be able to demand to talk to someone with a higher level position that has the power to approve or reject business loans. Bigger banks have more rigid rules and processes when it comes to a loan for business. A person that you are talking to may not even be able to approve your application even if he or she is impressed by your business plan.
Rachel Schwartz is the Marketing Manager of BHM Financial - one of the most trusted names in the bad credit loan industry. This company may be able to help you reach your financial goals. Please visit our Bad Credit Loan website or our Blog and find out today.