When you want to start a new business, you may investigate getting a business loan. These loans will help you to get you business up and running. You will have to make sure that you can prove that you can pay it back and that your business will be a good investment. You can do this by writing up a business plan for the lender that shows your intentions of how your business will be run.
There are many places that you can look into for getting a business loan, even some online lenders can help you. If you want to start a new business, or bedriftslån oppstart, you will have to research to find just the right lender for your business. Make sure that you check online reviews, the Better Business Bureau, and your attorney general’s office to make sure that the lender is legitimate and reputable.
This article will give you some tips on how to obtain a business loan and some ways to help your application be more successful. You can also do more research on business loans and find out even more tips to help you out. This article is just a start for you, you may want to search for people who write business plans and can help you out.
1. Show How You Will Pay the Money Back
Have a business plan put together that will show the lender how you will repay the loan. In your business plan, tell how you plan on making money, how you will be successful with that, and then how you will use some of your profits to repay the loan. If you have an ideal business plan, you have a better chance of getting the loan.
It helps the lender to know what you will be doing and how you will make a profit. This shows the lender that you have thought out the process and, if done right, you can even show how the business might fail and how you will prevent that from happening. A good business plan will help you to secure the funds that you need.
2. Personally Guarantee the Loan
Be willing to show the lender that you and any business partners that you may have are willing to pay the loan of personally if something happens to the business. The lender will need you to show how you will do this, so include it in your business plan. If you do not have the money personally, you may have to put up your house or other high dollar asset as collateral.
The lender will be more likely to give you a loan if you can show that you are willing to put up your personal possessions in order to get the loan. This shows that you have faith in your business and do not expect the lender to have to foreclose on your home in order to get payment.
3. Realize That it is Not Just About the Business
The lender will not just look at the new business that you are applying for, they will also investigate your past business forays and all the debt that you may have incurred. If you can show that you are paying off your previous debt, the lender will be more likely to approve the new loan.
If, for some reason, you have not been paying off your debts, the lender will ask you to have a co-signer – someone that will take responsibility for paying off the loan if you fail to do so. If you are asking for a lot of money, the lender may require more than one co-signer. To learn more about co-signers and their part in your loan, see here. They want to make sure that the loan will be paid off and you will not go into foreclosure.
4. Be Candid About Your Financial Situation
Be upfront about what is going on with your financial situation with your loan officer. If you decide not to tell them that you have had struggles on previous loans, the loan officer will find out anyway. If you explain what happened and how you overcame those struggles, you are more likely to get a new loan. Not everyone has perfect credit history, and your loan officer will understand that.
If you lie about what happened in previous loans and your loan officer finds out about it, you are less likely to get the loan that you want. The loan officer will not trust you or your ability to pay back a new loan. Being honest and upfront about your struggles is the way to go if you want to be approved for the loan.
5. Be Realistic About Your Loan Needs
You need to be realistic about how much money you need to borrow, borrowing too much or too little can hurt you down the road. You want to raise enough capital to be successful, but not so much that you cannot make payments down the road. You want to have just enough to meet all your beginning needs, and then earn money from your business to be successful with it.
If you borrow too much money, you will not be able to make the payments on the loan. You want to be able to make those payments so that you do not lose your new business. Be frugal, but not too frugal that you are struggling with day-to-day operations.
6. It is Not the Lenders Job to Provide You with All the Money You Need
You must accept the fact that the lender cannot and will not provide you with all the money you might need to start your business. They can help you, but they cannot do it all for you. Therefore, you will need to have other capital from your savings, from partners or other investors, or any other way that you can.
If you do not have any other way to get the capital that you need, then maybe it is best for you to wait until you get that money. Figure out how much that you will need to have a successful first six months or so and go from there. When you have a good portion of the money that you need, then you can go to a lender and apply for a business loan.
7. Understand the Purpose of a Business Plan
You know that a business plan is important when you apply for a loan, but do you understand why it is important? The main purpose of the business plan is to show the lender that you understand the market you will get into and how to run your operation. If you do not know these basics, you will likely not get a loan that you need. It is probably best for you to learn all that you need to know and put that into a business plan before you even think about getting a loan.
The lender will look at your business plan and see what you know before they lend you any money. They want you to be successful, if only so you can pay the loan back in a reasonable amount of time.
8. The Lender Cannot Help You Write Your Business Plan
The lender cannot help you with your business plan, they are not allowed to do that. You can find help through different agencies that are designed to help small business people get started. You can check out SCORE ( https://www.score.org/ ), your local small business administration, certified public accountants, and other businesses that can help you get started.
You can also do a lot of research online because there are many other small businesses that are able and willing to help new businesses get started. They have shared written business plans to give you an idea of what to plan for and how to write it all up. There are other business professionals that are also willing to help you out if necessary.
9. Make Sure You Have At Least Basic Financial Knowledge
You need to be able to know at least the basics of your financial picture for your business. You need to be able to explain it to your lender in a way that shows that you know what you are talking about. If you do not have the basic knowledge, your lender will not be able to help you to acquire the loan that you need.
There are several sources online that can help you to learn the finances behind your business. There are courses through many different agencies that can teach you these basics if you need. It does not matter where you get the knowledge, as long as you thoroughly understand it and can explain it in laymen’s terms to your lender.
10. Understand the Different Types of Loans That You Can Acquire
There are banks that can give small business loans and can offer you lower interest than other institutions because they are regulated by the government. You could also get a loan from a Small Business Administration, but the interest rates may be slightly higher. Credit cards are still another way to get the funding that you need, but they have the highest interest rates.
It is important to know which of these funding solutions would work best for you and your business. The solution that works for one business, may not work for you and your business.
These are just a few of the things you need to know in order to obtain a loan for a small business. You can do some research and find out more information for you and your business.