While running a business, the greatest stress factor lies in acquiring funding, without which a business cannot thrive within a competitive market. It is rather easier to acquire small business loans and business cash advance. Many private lenders have developed programs which allow small business owners to acquire funding and save them from making the wrong choices.
But even then many get disappointed due to lack of funding options. This is because they do not research and face difficulties during the loan application process as lenders ask for documents required in applying which are often not prepared or completed.
The Wrong Private Lenders
Instead of depending on suggestion from friends and family, small business owners should research and look for the most suitable loan providing institution. Because mistakes are made by depending entirely on what their friends suggest. Due to their lack of research they choose the wrong investors, and lose most of their money in repaying large interests, rates ending up in debt.
Unclear Loan Proposal
While planning to enter the next phase of your business, you cannot just move forward without a proposal. A loan proposal which reports about you and your business to the money lending company, your future business plan, your financial requirements, how much money you require, how and where will you use it. How you intend to pay back the loan, and what your plans are if you are unable to pay it back. When private lenders and even banks have the entire plan, they then know your business’s potential and are willing to provide the funding.
This is the application of trust between you and the money lending institution. Even if you have a bad credit history, specify only the truth in your lender’s application. Omitting details may be extremely unprofessional on your part.
Be ready with your two years of tax records and two years of Business and personal bank statements when applying for a small business loan. Though you may not require them immediately but eventually, yes you will need them. If you don’t have an established business already, then your personal tax record and personal bank statement will help you in creating a trust with your lender as being a reliable and responsible individual.