In most instances, it is imperative for businesses to borrow money to start their company, expand, or even sell their companies. It is almost imperative for people to approach a bank and some people are hesitant due to the preparation and need to organize a great business proposal.
If a business owner has a good outline and direction for the company they may be in the position to successfully ask for a loan. Preparation is the key. You may want to visit the bank and see what the qualifications and expectations are for the lender. It would be best to visit your own personal bank. You also may want to thoroughly fill out the loan application. You may want to seek advice from other people who have already done it. Visiting your local SBA (Small Business Association) office may be beneficial. The idea is to build partnerships with as many organizations as possible.
You should also make sure you have a clear plan on how you will repay the loan even if your business goes sour. You will also have to discuss and share your credit history with the bank. It is best to be in good credit shape.
You should also try to muster up a great deal of your own money to almost match or stand against the amount you are asking for. This will give the bank the impression that you are serious about your commitment and have already saved money for your business.
If the bank you choose declines you, that’s alright, just keep trying. One slammed door may equate one opened door. In the business world you will always run into obstacles and dry seasons but preparation and the willingness to never give up will help you achieve your goals.
The good part about working with a bank is the fact that they will help you determine what is good for your company. Make sure you take the time to work with a bank who takes time to understand your business and your unique credit needs.
- Develop a written business plan
- Show you have a personal investment and a financial stake in the business
- Prove you have management experience and have a great knowledge of the field of business you are venturing into
- Show that you have a record of maintaining adequate retained earnings
- Prepare a contingency plan in case things go bad.
- Develop a plan that can protect you if a key person leaves