Whether or not you’ve tried lately to get a small business loan from a bank, you probably know others who have. Not as easy as it may seem, especially when the future growth or sustainability of the business hangs in the balance. The chances of getting approved aren’t so high. And then there’s the process itself: a numerous amount of tax records, financial statements and other documentation. Then weeks and even months of waiting.
But, who says getting approved for the loan you need has to be such a complicated process? While banks were busy cutting their approval rates for small businesses, other financing companies were stepping up to the plate to provide small businesses with the capital they need to grow and thrive.
Not only have thousands of small businesses across the U.S. received much-needed funding, they’ve also found an application/approval process designed to accommodate their needs—much less paperwork, streamlined and simplified, faster turnaround.
But that doesn’t mean that getting funding is the end of it all, there are still things that you as business owner needs to do to increase the chances that your small or medium business can get the capital it needs. The secret is being prepared ahead of time, before you actually need the funding. That way you can ensure a smoother process—and the peace of mind that comes with it.
Here’s what you should be doing now:
- Research your alternatives. There are big differences among banks, business financing companies and other sources of capital. Understand your alternatives. Look at their track records, and pay attention to testimonials and rates of repeat business.
- Keep detailed and timely records. This is a given for all businesses, but it will really pay off during the financing process.
- Have a plan. This, too, goes without saying. But it’s especially important to be able to show that you have laid out a course for your business.
- Pay your bills on time. It’s helpful to be able to demonstrate that you’ve been regularly paying vendors, etc.
- Tie growth/results to the capital you’d be getting. Showing in black and white how you’ll put the funds to work and the results you expect to accomplish with it is a real plus for those who might be offering you a business loan.
How do you know when it may be time to actually choose a provider and apply for financing? There are some signs to watch for:
- An opportunity for growth or expansion that you need to act on quickly.
- Unfilled orders—you’re just not keeping up.
- The need for more inventory—or a terrific inventory purchase opportunity.
- The need to expand or upgrade your current space.
- Needing to add one or more locations,
- Needing to purchase or upgrade equipment or technology.
- Needing to add staff and/or expand your training program
- Bridging gaps in or uneven cash flow
- Meeting unexpected or emergency expenses
Experts say the worst thing you can do is ignore these signs. Getting financing just may be your next, best step!
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