| 5 Tips for Getting a Business Loan

Posted in Business Financing at 9:00 AM by Loftis Consulting

Most small businesses will need an investment of capital at some point. Whether it’s to put more money into a marketing plan or push your business to go further and make more profit, business loans aren’t a must have. However, getting a business loan depends heavily on how you present yourself and the business. So, when you need money from the bank, here are a few tips on how to get it.

 

Demonstrate Your Reliability

If you’re an already established business, your bank will need to know they can trust you with their money. This means you’ll have to demonstrate how well your business manages money. It’s important to know your business finances inside out before stepping into that meeting. That way, you’ll be able to show how your business makes a profit and how you plan to stay in business for the foreseeable future. If your business looks like it’s falling apart at the seams and you need the money to survive, it’s unlikely you’ll be able to secure a loan.

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Be Specific

This is especially important for businesses just starting out. In order for a new business to get a bank loan, the bank will need to see a business plan. It’s no good just saying your building a manufacturing company when you can say you specialize in custom sheet metal fabrication. The more specific you can be, the more likely you’ll get the money. Businesses that provide a niche product or service are unlikely to have as much competition from other businesses. Therefore, if you have the only business of its kind in your area, you’re likely to get all the custom and high profits.

 

Why Should You Have the Money?

It may not be a question that you’re asked, but it should certainly be one that you think about answering. The more reason you can give the bank to lend you money, the better your chances. If a bank is on the fence about whether or not to lend, give them as much information as possible. Outline your future prospects so the idea of investing in you becomes attractive. Banks know that you often need money to make money, so demonstrate how you’ll use the money to make a profit.

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Stay Local

If you’re a small town business, don’t go to a national bank. It’s likely that national banks will have better prospects than you, so you may find that your business is overlooked. A local bank will have more time to consider your needs, and they look better if they’re investing in the community. It’s also likely that you’ll know someone in the bank who can put in a good word or is willing to vouch for your reliability.

 

Keep Your Own Finances in Order

There may be times when banks or lenders look at your personal finances before agreeing to lend. If you’ve got missed payments and piles of debt on your record, they may be swayed against lending. Try and keep your personal finances in order to avoid disappointment.

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