Tips For Securing A Business Loan
- March 26, 2018
- Posted by: Phoenix Consultancy
- Category: Business Loans, Business plans
Small businesses often need business finance, such as a business loan, in order to get their brand up and running or to cover unexpected costs. Access to finance can be the key to unlocking your business’s potential, and achieving the growth you dream of. It may be useful at any stage of your business’s growth, whether just starting out, or even if your business has been running for years and you’re looking to take it to the next level.
While a business loan is often the first finance option that many small business owners think of, there are many other finance options offered by banks and other financial institutions which may be more suitable for your situation. These could include commercial property loans, commercial equipment leases and commercial vehicle leases, overdrafts and lines of credit.
Understanding which finance option is most suitable for your business is the first step to improve your chances of securing finance. Here are a few more.
- Work out what is realistic
It’s a good idea to find and compare credit options based on the amount of money you need to borrow, how you want it supplied and the type of security you want to provide (residential, non-residential or none at all).
- Have a good credit history
Lenders are looking for two things when it comes to your credit status: an existing credit relationship and a relatively clear history. If a borrower already has an existing loan which they’re servicing on time, they are much more likely to be successful. Of course, there are options for those who are either credit impaired or just don’t have a documented credit history, and a finance broker can help clarify these.
- Be prepared
Make sure you have up-to-date paperwork and tax records, a solid business plan and that you’ve done your research. You should have a fair idea how much you want to borrow and how you plan to spend it. You should also know your total worth, listing your assets and liabilities.
It is also a good idea to be able to show how risk will be minimised, both to you and to the lender. Your finance broker can help with this.
- Provide more than one exit strategy
Lenders want to know how they’re going to get their money back and some want up to three scenarios for what is called the ‘exit strategy’.
- Find a Finance Broker
Speak to a finance broker, who can help you work out what loan type and lender are best for your business and you. Finance brokers work with clients to determine their borrowing needs and abilities, select a loan suited to their circumstances and manage the process through to settlement. They also do a lot of the legal and other paperwork, they have access to a wide range of loans and are experts in the area.
To find the right commercial financing options for you and to give your business the best chance of success, speak to our finance specialist, Kunal Acharya at Phoenix Lending Solutions by calling 08 6444 6311 or email firstname.lastname@example.org today.