Looking for funding to fund your small business? The road ahead is full of twists and turns because it does require a lot of time and research to locate the best funding program that suits your business. Due to the emerging lending industry, there are almost thousands of lenders out there and pick the best one out from the pool of lenders with best funding solutions is impossible.
In this article we are going to help make the lending process easy for small business owners. Here are some of the tips that you need to follow;
- Getting Your Financial Ducks in a Row
The process of getting a small business loan for your business is much easier rather than getting your financial ducks in a row. Organizing your financial documents is an essential step and you have to organize all your financial documents such as balance sheets, tax documents, previous loans repayment statements as well as profit and loss statements.
- Know Your Funding Needs
The first step you need to take before going on the quest of funding solutions is to know your business’ funding needs. Figure out the funding needs that are the most pressing rather than looking into the longer term needs of your business. Your lender will also want to know about your funding objective and how much amount of cash you need to borrow. Knowing your funding needs before applying for a loan can help you to determine which lender and funding solutions are the right fit for your small business.
- Check out Your Credit Score
Another important step before applying for a small business loan is to check your credit score. Get a copy of your credit score for both personal as well as business credit score. If there is something wrong on your credit report take your time and get your credit history in order. Ask the credit reporting agencies and bureaus to fix the problems. If you have bad credit problems, your chances of getting funding will decrease. However alternative lenders do have some funding programs for bad credit borrowers.
- Write a Winning Business Plan
Almost every lender requires a business plan attached with your loan application. The success of your small business loan application highly depend on your business plan. A well deliberated business plan can convince your lender that investing their money in your small business is a good move. Here is a checklist of things that you need to attach with your business plan.
- Executive summary
- Business description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- Funding requests
- Financial projections
- Decide on Traditional or Alternative Lending
Almost a decade or two ago, there was only one way to get your business funded, that was your local bank. Their lengthy and long-drawn out lending process now made them a secondary option for small business borrowers. Currently, there are lots of alternative lenders in the lending market providing the best funding solutions at competitive rates and terms. Plus the whole alternative lending process is conducted online.
Here is the comparison of benefits that you can get from traditional and alternative lending;
Benefits of Bank Loan
- Face to face interaction with the lender
- As you are an account holder, you have an existing relationship with your bank
- You can ask other business owners about their lending experience with bank
- Bank loans have lower rates as compared to getting loans from alternative lenders
Benefits of Alternative Loan
- Fast funding
- Simple online applications
- The online process provide option to connect with multiple lenders
- Bad credit borrower can also apply for funding
Both funding sources have their own benefits and can help your business grow. It is advised to go for one after evaluating the terms, rates and requirements.
If you are a small business owner and looking for funding to invest in your business growth, small business loans can help you. For more details, please give us a call on our toll free number (833) 827-4412. Alternatively, get your free online quote by filling our online application form, if you’re ready to apply for a small business loan.