Small business loans have helped countless entrepreneurs start out. They’ve also assisted myriad older companies that need some temporary cash. But what does it take to get a small business loan? Here are some ways you can make your company more eligible.
Show You Can Repay
Lenders, of course, want their money back on schedule. That’s why it’s important to show you can repay a small business loan. A past history of on-time payments helps, as does carrying a low amount of debt in general. Additionally, a healthy credit score is another bonus, though isn’t always essential. Businesses producing revenue–which they can use to repay a loan–are more likely to obtain a loan than those that are not.
Have a Healthy Plan
Lenders will be interested in what you plan to do with the money. For example, a well thought-out expansion plan will look much better to a lender than a small business loan that’s simply meant to keep your company above water financially for a few months. Before you apply for a loan, make sure you can articulate how exactly you’ll use the funds in a way that reflects well on your business.
Make a Good Impression
This may seem like an obvious point, but early impressions are important in the lending process. Someone who can point to the effort they’ve put into obtaining education, guiding past business ventures, and gaining industry expertise will have a leg up over someone who can’t.
Put Some Skin in the Game
Lenders do not like shouldering all the risk of a small business loan by themselves. That’s why they often request that the borrower put up some capital, collateral, or both to secure the loan. When a borrower puts up capital, they involve some of their own money in the loan, and when they put up collateral, they involve a tangible asset such as real estate. Both options help show the borrower’s commitment to repaying the small business loan.
Ready to apply for a small business loan yourself? We can help. Visit http://www.perfectalliancecapital.com/contact-us/ to contact Perfect Alliance Capital and get started