Show Me the Money!
Starting a small business comes with a great deal of responsibility.
You have to make sure that your assets are secured, your operations run smoothly, and most importantly, that you have the money to finance your business’s needs.
The good news: a bank can help you with this by providing reliable funding.
The not so good news: there’s a bit of work that you should do beforehand to ensure that the bank will fund you without any issues.
But don’t worry, we’re here to share some tips and tricks to make sure you get the financing your business deserves.
Prepare, Prepare, Prepare
Have all of your important documents on hand before you go to the bank.
You’d be surprised how many small business owners walk into the bank to apply for a loan, expecting it to just be handed to them.
Always go in with a plan. Namely, your company’s business plan. This will make it easier for the bank to see what you plan to do with the money they’re lending you. If your plan is solid, the odds of getting that loan increase.
Also, be sure to bring along any important legal documentation that might be relevant. Basically, bring anything you think might contain even a sliver of relevance.
Have a Budget and Stick to It
This is a big one. By creating and staying loyal to a set budget, you can keep your cash flow as healthy as possible.
Banks are far more likely to trust a small business owner with their money if they believe they can get that money back eventually.
This should be fairly obvious, but it’s yet another mistake some small business owners make when applying for a loan. If you don’t have consistent cash flow, the bank probably won’t trust in your ability to return the money they lend to you.
Cutting into your expenditures can be difficult, but having a budget goes a long way towards hitting that ideal level of income.
Keep a Healthy Credit Score
A low credit score is indicative of a host of issues, and can be a huge red flag to a bank.
Why would a bank invest in a small business owner who doesn’t seem to understand how to handle their personal finances?
If your credit score isn’t ideal, there are steps you can take to remedy it.
Paying off your current debt and paying your bills on time, goes a long way towards fixing poor credit.
Additionally, meeting with a credit counselor can give you greater insight into how to really get your credit score looking good for the bank.
If you’ve prepared all of the proper documentation, made sure your income is substantial, and fixed your credit score, all that’s left to do is schedule the appointment.
Don’t be nervous. Take some time to remind yourself why you’re here.
You have passion and a company that you want to see thrive. Keep your eye on the prize and you’re sure to get the funding that you deserve.