Applying and even thinking about the small business loan is an important step, know it is a step forward. Multiple reports depict a rise in the number of loan applications from small business owners, and lenders are approving more than 60% of the business loan application. If you don’t want to recess the stream of cash flow to invest in another business, then a small business loan is a good option. Though, you still need to sacrifice your cash flow to make the payments. Consistent cash flow and incoming dollars are the oxygen of a small business.
You can either continue going with your current financial condition, or you can opt for the small business loan. After careful and rational consideration, many small business owners take a leap of faith in the lending, and the results are fruitful. Moreover, if due to any unfortunate incident this does not go as planned, instead of sulking to consider this as an opportunity to learn a lesson about money, funding, and small business loan application. And strike again with more preparation.
We always have your best at heart, so we approached 4 affluent entrepreneurs and asked them for their advice on small business loans. Managing a small business or entrepreneurship is challenging; it demands courage to take the risk, motivation to stand firm at the time of a financial storm. Go through the following tips coming from the experience and make the right decision, get rid of underlying confusion, and improve your chances of approval.
- Plan? Yes, the business plan is the key!
Microlending has been rekindling small businesses and entrepreneurs for quite some time now, but if you want a fair deal from them, a business plan is a must! Instead of looking at someone else’s story, I would be happy to share my own.
Five years ago, my friends and I thought about starting a preparatory school – where students would get classes on the undergrad and grad school admission test. At first, we were getting enough students, so we thought to expand. With minimal funds to expand, we ran out of money to furnish the place with furniture and technical equipment, so we applied for a term loan. With time, the number of students dropped leading to less profit. In the end, I had to give up my dream because I was finding it hard to clear the debt on time and I had to sacrifice my assets.
I don’t regret my decision of small business loan, I just wish to have a proper business plan. A business plan includes a mission, vision, the rationale behind your business loan application, and a repayment plan.
Applying or a small business loan is just one part, the only way you can make repayment on time is when you are running on a schedule. So, plan and take your business to new heights.
- “It takes money to make money.” Sol Luckman
A restaurateur, Mr. Gurcharan Sandher, lives in America in the Indian style. In the beginning, he and his wife were barely making any money, then Mr. Sandher learned to cook and opened a restaurant. His restaurant on Huntington Beach is still going strong for twenty years.
Keeping the growing success in mind, he thought it was time to open a second restaurant. This gentleman knew that it took money to make money, so he applied for a business loan by the Small Business Administration and he says that they advisors at the lending industry were very helpful as they walked with them through the whole process made them feel very comfortable.
The loan money helped him cover all the cost of the restaurant equipment and provided enough capital to keep the cash flow constant and cover the operating cost of the business. But this experience made him realize the importance of the phrase: “It takes money to make money.” As the dollars from his previous business help him clear the debt until his second business was financially stable.
Lastly, they trusted small business loans to provide financial aid and now they are happy with both of their businesses.
- Know your business, know your terms and take advantage of the next opportunity.
The head of Arenas, one of the prominent Latino film production companies, knew the terms and financial position of his business; somebody told him about this vacant office building next to the WB and Disney. He took advantage of this golden opportunity and signed the deal for $3.7 million. He applied for a504 business loan from the SBA and a traditional loan from the Bank of America.
External funding provided enough money to purchase the new building and with the remaining the head of Arenas wants to hire more employees. A right financial decision, at the right time, can lead to a profitable business.
- Work with someone who understands the niche of your business.
Lee Huffman works as DLH Partners and he believes that as a real-estate investor, he has to take help from small business loans and he chooses his lenders very carefully. As not all banks offer loans for every type of business industry. Pick a bank or an alternative lender that understand the mission, vision and financial needs of your business.
According to him, a borrower must make a list of the business loans as per their interest rate, eligibility criteria, required documents, and loan terms. Moreover, if you have any concerns regarding a business loan, ask your lender instantly. Make sure you are resonating with your financial lender at the same level.
The bottom line
Multiple successful entrepreneurs have taken shelter under business loan, now it your time to create a big impact by applying for a small business loan.
Take note of all of these tips and if you think these business loans can financially benefit your small business, head over to the official website of the Merchant Advisors, and apply for the small business loan of your choice! For more information, tips and tricks to generate more income, follow us on Facebook and Twitter (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412; we will help you every step of the way.