Every business needs cash and loans for small businesses can be one of the ways to get that cash. Here are a few tips to make the process a little easier.
1. Start thinking about a loan for your small business now, don't wait until the last minute. Plan ahead. Forecast a cash flow statement for the upcoming six months and revise it at the end of every month. If it looks like you'll need a cash infusion three months down the road you can start applying for the loan now and not run into a cash crunch.
2. Get your financial records for your business in order even if you don't need a small business loan right now. Lenders of loans for small businesses will want to see your basic financial statements: accounts receivable, accounts payable, revenues and profits and loss statements. If you keep these records organized it won't be a huge undertaking to get them together for the loan officer.
3. Establish some credit for your business immediately. The credit can simply be a store account, delivery service account or even a business credit card. Use the credit and follow the payment terms. You will be establishing your business as a reliable loan risk.
4. Establish a relationship with a bank that offers small business loans. Open a company checking account, after a few months see if the bank will offer overdraft protection.
5. Demonstrate that you can pay back the small business loan. Lenders look at a number of variables including: the risk of the principle of the loan and if your business can pay the interest. They also look at your personal credit worthiness.
If you follow these tips you should be able to get a loan for a small business without a problem.
Don't wait until the last minute
Establish credit now
Establish a banking relationship before you need a loan
Show your business is a worthy credit risk.
Do you need a small business loan? Find out more at 58 Ways to Find Money for Your Business
About The Authors Brian Hill and Dee Power have written several nonfiction books including Business Plan Basics , ” Inside Secrets to Venture Capital" and “Attracting Capital From Angels, ” Reach them through The Capital Connection