The Right Way to Plan for a Business Loan
The key to successfully applying for business loans is planning. If you’re not prepared, everything will seem more challenging. However, when you come prepared and informed, everything changes. Planning and preparation are two key steps that will help you to get the business loan you need.
Update Your Business Records
Considering that you currently run a company, the lender will want to evaluate the business records carefully. So, gather information regarding your company’s credit, tax returns, current debt, business assets, profit and loss reports and balance sheets.
Prepare a Business Plan
We consider that this is a vital step. In spite of the lender you choose, you have to present a comprehensive, compelling plan of activities for best results. Truth be told, until you have a detailed business plan, you won’t know the exact sum of money you need, or how much time it would take to repay it.
So, what should a good business plan entail? It should have present project financial statements for your company. It should include a statement of collateral or the value of the assets you’ll use for securing the loan. Additionally, you should implement an analysis of the Australian market, and how your business fits in that background.
Also, the business plan should indicate how much money you want to borrow and how you intend to spend it. Ideally, you should address these questions in a clear, comprehensive manner.
Plan a Presentation
Another way in which you could make your business plan even more compelling is by preparing a presentation. So, do your best at creating an interesting presentation accompanied by financial statements, charts, and graphs. Make sure you also include an executive summary. Some loan officers look at this first.
Prepare to Answer Questions about Collateral, Credit, and Capital
Before you get the chance to sit with a lender, you should ensure that you can provide detailed answers to the most trivial questions. The following criteria are crucial in the case of business loans:
- Capital: business assets you can afford to pledge to secure the loan.
- Credit: your business or personal credit.
- Collateral: amounts of cash you could use as down payment, from your business or personal funds.
In the case in which you don’t meet the requirements regarding capital and collateral, perhaps you should consider finding a co-signer who could provide them.
Make Sure You Include Your Personal Information As Well
Although your business is a corporation and you are applying for business loans, your own financial background is always a subject of interest. In some situations, you might be required to present a personal guarantee. So, another key aspect to planning ahead for getting a business loan is to have your financial records in order.
When you are fully prepared, you maximise your chances of getting the right business loans for your company’s development. So make sure you follow these guidelines. Do you have other tips on how to secure the deal when it comes to business loans? Share your ideas with us by contacting us here.