Getting small business financing is definitely no walk in the park. There are several processes involved in getting Business Financing . However, although it may seem daunting at times, getting funds is not impossible by all means. You have to keep a few tips in mind however; these will help you get small business financing without any hassles-
- Eligibility criteria- Eligibility requirements vary from one lender to another. You should check these very carefully before applying. Make sure that you meet all requirements before applying.
- Documentation- Always make sure that you provide all documents that are required. You should always make sure that you have financial statements (including profit and loss statements) of your business for the last 2-3 years in tandem with your income documents, tax returns and balance sheets. You should have records of accounts receivable and payable in tandem with a proper business plan on using these funds and repaying the same. A company profile may also be required along with profiles and personal documents of owners or entrepreneurs. Growth estimates and other projections may also be required along with KYC documents. Make sure you have everything ready.
- Credit History- As a business promoter/entrepreneur, you should always know your credit score and should be aware of your own credit profile. Make sure that you have repaid debts and EMIs on time without defaulting on any payments. Your credit score will be healthy if you pay on time and use credit wisely.
- Feasibility Report- In many cases, lenders may ask for profit and loss projections for at least a year or a little less. You should always have some basic standards to follow while making this report. Always make assumptions based on sound advice and present income trends.
- Preparation- You should always be prepared in advance in order to have greater control of the entire process. Do not be unprepared since that will leave you shaky when it comes to providing more documents or catering to last minute requirements. The more prepared you are, the easier it will be for you.
- Homework- Do your own homework before applying. Compare lenders on the basis of factors like interest rates, maximum loan amounts, eligibility criteria and other terms and conditions. Find the best lender for your needs based on how well you match the criteria and other requirements.
- Do the Math- Always apply sensibly for a small business loan. Be sure of the amount that you need and do not needlessly apply for more. Always have an idea of how much you can afford to repay. You can even use online calculators to work out the EMI that you will have to pay every month once the loan starts.
Remember that patience and perseverance are key attributes that will stand you in good stead when you are going to apply for a small business loan. Getting small business financing is definitely not impossible but requires you to invest some time and effort into the process.