|
Asking
for money is never an easy task. And when it comes to finding financing for
your business, it can be even more difficult. There are several steps you
can take to improve your chances of acquiring funding and making the process
a smooth one.
First,
be prepared to explain to your potential lender why you need a loan or line
of credit for your business. Come prepared with complete, accurate and
up-to-date financial records. You should have the basics with you:
profit-and-loss statement, balance sheet, and projected cash flow. Reference
letters from previous lenders, current suppliers and any strategic partners
may not be required but can help to impress financiers. Secondary documents
you should have prepared for your lender include: a current business plan, a
client list and appraisals of assets that may serve as loan collateral. Your
accountant can help you prepare and compile these documents.
Second,
be sure that your and your business partners’ credit history is clean and
in good standing. Be prepared to explain any irregularities or problems.
Loans are serious business. Your lender thinks so and so should you. Review
the terms, payment, interest and fine print of any loan agreement. If you
can, consider having your attorney and accountant review the terms. Request
the documents in advance so there is time to review them.
Finally,
don’t just settle for the first bank that says yes or the one bank you
usually do business with. Shop around and consider the terms and interest.
This will improve your chances of getting the best terms and finding a
lender. Every bank has its own criteria and requirements for lending to
businesses. It’s important to pick a program that best suits your business
and your needs. Take the time now to prepare and establish your business
credit line so your business can grow responsibly and dynamically.
|
