Every business owner must have had the thought; ‘I really could do with more capital at this juncture’. This is because all SMEs at some point are likely to need some financial boosting so they can move their business to the next level.
Here are some common pointers that might come in handy when determining your specific financial needs:
Determine what Type of Facility Your Business Needs
Choosing the most appropriate facility for your business is crucial, and while your banker should be able help to advice you on which one is the best option, it’s good to have an idea of what you’re dealing with before you make the final decision. Prior to applying for the loan, know what you want. In some cases, a loan may not necessarily be the answer.
There are so many business financing options available in the banking and finance market, and this can be confusing if you don’t take some time to get familiar with how all the different products work. Different products suit different needs and requirements.
In addition, be sure about what you are seeking to do with the money, what results you are aiming at, over what time frame, and how you’ll organize loan repayments in a way that suits your business needs and all that.
Do your homework, be prepared, know your limits and make an informed decision.
Ensure Your Documentation is in Order
The most beneficial back-up you’ll need when getting a credit facility is; bank statements, profit and loss statements, sales stats, cash flow, business plan, competitor analysis, insurance, growth patterns and client demographics, management team and board detail. Basically, you will need all documentation that tells the story of your business in the most favorable way. This will enhance your credibility to your lender and increase the chances of your facility getting approved.
SO, if you’re looking to apply for a business loan:
- Consider the whys, where and when. Know exactly what you want to achieve, how much financing you need, how you want it and how you want to service the loan facility.
- Research pays:How can you have a way forward and know what kind of facility you need without doing an intensive background on the market?
- Prove your credibility:A lender will want documentation to prove that you have a legit business and you’ll be able to service the credit facility given to you. Therefore, ensure your books are in order, know where all the information you need is found and how to interpret it.
- Feel the Love:Don’t be afraid to show how much you love your business. The human aspect of any business is important and financiers want to see your passion and commitment.