If you’re a young entrepreneur, who’s already tried the process of getting a business loan, you would agree on the fact that the process of obtaining this loan/grant is very intimidating and requires good preparation to make it less dramatic and stressful. We’ve collected 5 major hints you must do before you could actually apply for it and make further appointments with a loan provider. By the way, with Personal Money Service it is always a pleasure to get small business loans online.
Develop a Business Plan
Yes, just like in our first article, we still insist that the plan is vital here. Why is the planning necessary? First, though planning you state realistic business goals and secondly, provide proofs of how this plan helps to achieve those goals. Remember to not only describe things globally but also include fundamentals, essential for every business. This implies current and future financing, sales forecasts and ways how you’re going to reach them – through marketing/hiring planning, etc. Useful tip: some large companies hold templates for writing a business plan on their official websites – you can check one on the UK Government’s Great Business webpage.
Work on a Cash Flow Forecast
If you think your business plan looks great, this doesn’t mean your preparation ends up on it. The lender could have the same opinion about the plan too, but this wouldn’t be enough for him to straightly give you a loan. Like anyone else, he wants to see guarantees of your ability to repay the loan.
This is why beforehand you must predict your cash flow, in other words, the movement of money in and out of business. Your cash flow forecast must indicate when you’ll be receiving income and when you’ll be paying others. Receipts, payments and opening/closing bank balances are required as well. There are really many reasons why some businesses succeed and others fail.
Overview Some of the Options to Get Financing
How to obtain a business loan? Well, for your information, it is quite possible for a small business to receive funding through either crowdfunding, government grants, investors and simply online through lending providers like Personal Money Service. You might want to choose one of those available finance options, but beforehand you should consider why your choice is beneficial out of other ones. Sometimes people would come to the point, when they could handle things without external money investments and that’s fine too, as soon as you’re quite stable with your current funding and have a clear plan of finding support in case of serious economic hardship.
Prepare an Elevator Speech
The ability to make a good presentation about your business, clarify goals and provide convincing reasons why people should invest in your project is very significant. Therefore, you must develop a strong elevator speech. It’s a very short presentation, which lasts no longer than a couple of minutes. Each of the speakers must be well-rehearsed, thus you ought to work meticulously on your speech in order to be quick, precise and up to the point.
Present your Working Industry
Any lender is interested in things he’s basically investing too, therefore they’re always curious about the industry’s outlook and want to know more about the competitor landscape, in other words, which other businesses attract the clientele with same products or services and how to stay on the top of your potential competitors. This information shouldn’t be ignored.
What’s next? If you’ve gone through the list and completed all the necessary tasks, then applying for a business loan shouldn’t create any more difficulties, as soon as all your documents (bank or trading accounts, statements, cash flow forecasts, and business plan) are fine. Sometimes you could be required to provide your statements about personal budget or even assets to make sure you don’t spend money on your personal needs.
So far, this is it. Good luck with your application!