Obtaining Unsecured Business Credit & Loans Even in Today’s Credit Crunch
As many business owners have found, unlocking the borrowing potential of their business to gain credit is essential to the sustained success and growth of their business in order to fulfill their long term goals. Obtaining business credit and taking the proper steps for achieving success in funded business ventures is very important in today’s economy. Below are some steps to take in obtaining the financing your business needs.
1. Make Sure You Have A Good Business Plan
If you have a business (or idea for a business) and are seeking financing it is in your best interest to get a business plan prior to submitting a financing request. You can either write the business plan yourself (you can pick up a business plan software at most office supply stores or online), or hire someone to write your business plan for you. If you are hiring someone to write your business plan, make sure you inquire about their experience, credentials and references. It is also a good idea to make sure, you will be able to make updates to the business plan you are paying for (if choosing that option). This will ensure you have a business plan you can continue to use.
2. Ensure Your Proposal Can Be Understand From The Perspective Of An Uninterested Third Party
It is very important to read through your business plan and overall financing proposal as if you were a representative for the lender. Sometimes business owners can forget that the techniques they use when selling their product or services are just as important to use for the purpose of effectively promoting and selling their financing proposal for their business to the anticipated lender. As with a sales pitch or presentation for a product or service, a financing proposal needs to quickly grab the reviewer’s interest, and make sure it is simple enough for the reviewer to understand under the assumption that they have absolutely no knowledge of your business. Keep in mind as with most other things you will usually only have one shot to make a good first impression. In today’s credit crunch your first impression with your financing proposal is crucial because there are so many searching for financing. If your business plan is not easy to follow, there is undoubtedly another proposal right behind yours that the lender will be able to move on to for consideration.
3. Make Sure You Upd
Before applying for any new financing, make sure you are submitting all the most updated and relevant info about your business. This may sound obvious, but many business owners think that they can “get the ball rolling” on their financing and make any updates later if the lender is interested in their overall financing proposal. By using this strategy, the business owner could get denied financing simply because they gave the impression to the Lender they were unprepared, unorganized and unprofessional. Also some business owners fail to realize that even if they mention the proposal needs to be updated; it does not mean that the representative they mention this to at the Lender will pass this on to whoever inevitably reviews the request. Again, this goes to putting your self in the lenders place, and the impression you are making. If the lender thinks you didn’t feel it was important enough to put any effort into making updates to your proposal why do they want to spend their time working with you, and potentially funding your loan request, especially when they may very well have other deals waiting their review?
4. Keep Your Options Open & Try New Financing Strategies
There is a whole range of financing products available from institutions to venture capitalists. Most of these companies prefer one type of industry over another, and only specialize in a few financing structures. Make sure you know the potential lenders financing preferences, and if there are specific industries and products they will stay away from approving. By inquiring and making it clear you do not want to waste time, the representatives from the lender will appreciate you for being forward and respecting their time as well. They may even give you a recommendation for a financing source that might be the perfect match for you, and if they don’t it doesn’t hurt to ask. Also, keep in mind if you haven’t heard of a financing type or lender and if the terms seem to be different then what you are used to, after doing some research ask yourself it is reasonable and more importantly move you forward to your goal. Often business owners can get so wrapped up trying to find the best offer or dealing in only what they have heard of before, that they are failing to take into account the amount of money they are losing because they are going without the needed funding to move their business to the next level. Ask yourself if what is being offered is better then nothing, will you be able to move your business forward with what is being offered and overall will it put you in a better place? If the answer is yes, you may not have everything you want, but by moving forward you can save yourself time, money and open the doors for future opportunity.
5. OBTAIN BUSINESS CREDIT – Realize Your Personal Credit & Assets Aren’t Everything Business
There are a lot of business owners out there that have bad credit or lack personal assets. This doesn’t mean they will be unable to get financing, they will just need to look a little harder. There are financing sources that specifically deal with individuals with poor credit, or don’t require any personal credit at all. One way to make sure you are prepared to get financing no matter what your situation is to look into obtaining business credit. Business credit is a way to build up your business and separate personal assets from your business, and obtain additional funding you would not personally qualify for.