Need finance to cover cash flow gaps in your business, finance growth or expansion, or invest in extra working capital? Keen to start a new business but need a financial leg-up to make it happen?
Securing a business loan can be an excellent way to get one step closer to achieving your business goals, but you need to be well-prepared.
Here are our top 5 tips for getting a business loan.
Improve your chances of being approved for a loan with a solid business plan. This should outline your product or service offering, the problem/s you solve, how you fit into the current market, and your unique value proposition. It should also include a marketing plan, pricing, an overview of your team and how you operate, and your measures of success. Most importantly, cover your income, expenses and sales projections. And remember to add an executive summary at the start of your plan
You’ll want to show lenders you have the product or service and know-how to be successful. Lenders also want to know why you need the money and how you’ll spend it to grow your business.
If you already run your business, lenders will want to see you can confidently make your monthly repayments. They’ll do this by reviewing your cash flow and looking at existing debt and past tax returns.
If you’re starting a business, make sure you have detailed and realistic sales projections to show the lender. Also, give lenders a financial plan showing how you can comfortably meet your loan repayments.
A good credit rating will improve your likelihood of securing a business loan, as you’ll need to meet the lender’s credit criteria. Some factors that will help you score well include having an existing loan or bills you always pay on time, keeping your credit card balances low, a low debt-to-credit ratio, diversifying your credit, and holding onto safe accounts.
Enlisting the services of a qualified and experienced finance broker can save you time and hassle while improving your chances of getting a solid loan. A professional finance broker will get to know your situation and needs and help you find the best loan and lenders for your business. They’ll also manage all the loan paperwork through to settlement and answer your questions along the way.
Before your first meeting with your finance broker, gather all the necessary paperwork, so nothing holds up the loan application and approval process. Lenders will be looking to see your tax statements, revenue records and your written business plan, as we mentioned earlier.
Need help securing a business loan?
To give your business the best chance of success, talk to Mel Finance your Melbourne mortgage broker about finding the right commercial financing options for your needs and business goals. Contact us today to learn more about how we can help you get one step closer to building your dream business.