So you have a great idea for a small business, but you’re unsure of where and how to begin. You may have heard about the Top 5 books every young entrepreneur should read, but now you need to take action. You know you need funding to get your start-up off the ground, but it seems next to impossible to secure a loan.
While this can be discouraging and even worrisome, know that every young entrepreneur hits this wall in the beginning. While it can be difficult, how you handle this obstacle will set the stage for how you manage your business and every problem that can, and most likely will, show up along the way. Fortunately, there are a few sure-fire ways to secure a business loan from anyone that will not only begin your business, but keep it afloat.
Check out these tips on how to get a loan, grow your business, and court success.
1. Build Good Credit
This may go without saying, but having good credit is one of the most important elements of securing a business loan. If you can show that you pay money back on time, that you handle your money well, and that you can be trusted with other people’s money, people will be more inclined to invest in you and banks will be more likely to approve your loan requests. If your credit is not where it should be, you should wait before pursuing a business loan and find ways to fix your credit score.
2. Be Professional
As a young entrepreneur, being professional can go a long, long way. When you show that you not only have a good idea, but are also savvy with how to handle and approach a business, it immediately ups your credibility in the eyes of others. It’s simple to carry out a professional persona: be polite, be punctual in all correspondence whether it is face-to-face, through email, phone calls, or text messages, be studious, and dress for success when meeting with colleagues and clients. Show the world that your business is worth its attention, and the attention will come.
3. Be Clear
When looking to get a business loan from a bank or other entity, it is imperative that you are clear about your business while making your pitch. Outline what your business is, why it matters, and what it plans to do. If people are going to be investing money in you, they have the right to know what their money is being used for and whether or not they can trust their loan to be reimbursed. When you are clear about your goals and intentions, you automatically increase your trustworthiness in a lender’s eyes.
3. Have a Plan
You’ve got the idea, you need the money—and then what? Show your investors that you have an actual plan for the loan you’re asking for once you get it. Give them a detailed outline of where the money will go, how it will be used, and, if you can plan that far ahead, when you will be able to repay the loan you’ve received. Being organized shows that you are serious about this endeavor and that any money you receive to fuel your startup will not be squandered, but put to good use.
4. Have a Partner
Partnerships are often the lifeblood of most small businesses and startups. Teamwork shows dedication, and having a partner shows that there is an element of trust to your business. You’re not in it alone because you have another person, another worker, another investor who is as dedicated to your small business as you are.
Getting a business loan is often the first step to success for a lot of young entrepreneurs. You have an opportunity to make a difference in the world and something like money (or lack thereof) should not stop you. Your chances of receiving a business loan from almost anyone will automatically be better if you practice some or all of these steps, so do your homework and get started.
Basis365 offers affordable outsourced accounting services for tech startups and small businesses. If you need help before pursuing your business loan, take a look at our plans. You can also call us at (855) 236-5669 x711. We can’t wait to help your business dreams become a reality.