By Aqib Raja
Starting a business is not easy. In fact, it’s estimated that about half of new businesses will fail within the first five years. There are a number of reasons why new businesses may not make it, but research shows that about 82% of businesses that fail do so because of cash flow problems.
If you need more cash to operate your business, a loan might be the perfect solution. Follow these tips to secure a loan and keep your business alive:
Use A Familiar Lender
Banks are more likely to approve loans for business owners they know. Because of this, it’s best to visit the bank that your business works with first. After all, it’s riskier to lend money to a stranger than it is to lend money to a friend. Keep this in mind when deciding which lender you should choose.
Don’t attempt to secure a loan for your business without doing your homework first. The lender may ask you countless questions about your business, what you plan on doing with the money, and your ability to repay the loan. It’s important that you know how to answer these questions with confidence. For this reason, make an effort to rehearse with a friend or colleague beforehand so you can practice what you are going to say once you’re in the hot seat.
Don’t Let Credit Concern You
Many people worry that a low credit score will stand in their way of getting the cash they need to grow their business. It’s true that a low credit score could affect your eligibility for certain types of loans, but there are other options available. Think non-traditional loans such as car title loans or secured loans that require the borrower to use personal property as collateral. Lenders won’t care as much about your credit score if you are putting up collateral, so you shouldn’t have trouble securing one of these loans.
Gather the Right Documents
Show that you are prepared by coming to the meeting with the lender with the right documents. Most lenders will want to see your business plan, tax returns, bank statements, lets of incorporation, intellectual property registration, and business licenses. But, it’s best to bring too much rather than too little, so feel free to bring any documentation that you believe is relevant.
Take Advantage of Free Resources
There are many different free resources that are available to small business owners who are facing financial difficulties. If you’re in a cash flow crisis, consult with one of the experienced business counselors affiliated with the U.S. Small Business Administration (SBA). Located throughout the country, these business counselors provide free advice to small business owners in need. Schedule a one-on-one so you can share ideas, get advice, and discuss your unique situation with a counselor. It never hurts to get a second opinion from a neutral third party who has been in your shoes before.
Don’t let your business fail without putting up a fight. By following these tips, you can secure the cash you need to succeed.
About The Author:
Aqib Raja is a Digital Marketer, Link builder, Guest Post and an IT Professional. He loves to write on different topics. In free time, he likes to travel and explore the different parts of the world. You can follow him on eyesonsolution.