There are many people with many forms of lending, including traditional banks and alternative lenders, who want to expand credit. But usually, small businesses can become their own worst enemies when it comes to applying for loans. Here are some tips to increase your success rate in accessing loans.
START THE RELATIONSHIP WITH THE EARLY BANK
Human nature is not going to find resources until you need them. However, relationships built early always have a stronger influence. Look for a relationship with a banker before you need it. While there are no secret places where lenders or gatherers will let you approach them, you can attend events or get referrals from your network acquaintances, such as lawyers, successors. team members or entrepreneurs and business owners. In addition, you can build a banking relationship from current accounts, credit cards and other banking products. Nurturing this relationship will create a solid foundation when you need a loan.
RECEIVE YOUR PERSONAL CREDIT BY ORDER
As a small business owner, you are closely connected to the financial success of your business. That means that your personal credit will be a staple that can guarantee a loan. Pay attention to your own debt and increase your credit score before seeking bank funding for businesses.
HAVE ORGANIZATION SKILLS
One way to get what you want from a banker is to make their job easier. Help them to help you access capital with thorough and thoughtful interactions. Prepare business plans and financial reports before meeting. If they ask for documents, send them all in an email with a checklist or clear summary that shows your positive. This may seem obvious, but many banks stress that lack of organizational skills (or awareness of them) is a major barrier to lending.
UNDERSTAND YOUR NUMBERS
While equity investors are compensated by the growth of companies, banks or other lenders are compensated by your refund of your loan with a small interest rate. This means that they cannot accept the same type of risk as equity investors but often focus on your assets, cash flow or both. Know what you can use as collateral or cash flow you generate each year to repay the loan, as these are particularly important figures for lenders.
USE LOCAL RESOURCES
If you are overwhelmed and do not know where to start the process, or need help to create a business plan or financial plan, try using local resources like SCORE and SBA, the supply method. grant resources for small business owners and ambitious entrepreneurs.
Source: Saga.vn
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