Let’s be honest here. Most banks are not lining up to give out business loans. Companies really need to prove themselves. It’s the age old saying of “earn your way.” Banks and other financial firms need to know that you are in good standing. Banks don’t want to get into business with someone who is a risk. Banks did that once before, many years ago. It ruined them; and ever since, most have been gun-shy about the whole thing. However, choosing an alternative financial institution such as https://certifiedbusinessloans.com/ can make your loan process less hectic with customized solutions to suit your specific type of business.
How do you prove yourself, especially if you are a small business just getting started? Here are a few tips to help make the situation a little less painful.
In order to qualify for a SBA or bank loan, your company has to show success. The profit margin needs to be really good for the previous 3 years. Another thing banks will look at is the credit score. Always know what your credit score is. If there is something in the system which will come up as a red flag, have it looked at beforehand. Fix whatever needs to be fixed. Your credit score is your responsibility. Never assume the bank won’t look at it.
If there is even one red flag that pops up, the bank could deny you the loan. Banks will also require a personal guarantee from you and your company. They will usually ask for something of personal/financial value to secure the loan. If your business has been doing really well, then they usually let the profit margin speak for itself.
You need to pitch your own story. Banks aren’t going to hand out a loan to you like that. Explain what you are looking for and why you need it. Explain what you hope to achieve with the loan. You really need to lay things on the line here. You have to make yourself vulnerable, if you ever expect to have the loan happen.
Banks want to know why they should approve the loan. Banks want to know why you deserve it more then others. Profit margin is important, but there also needs to be a plan. Your plan needs to include past, present and future goals.
SHORT-TERM IS BETTER THAN NOTHING
You need to have a plan B. Don’t just rely on the plan A. If the long-term loan does not come through, think of other options. The bank might have a short-term plan. I suggest you take them up on it; especially, if you don’t have a better option in the beginning.
GO DOWN THE STREET
It’s always best to stay local. Go talk to your community bank down the street. They are more likely to hear you out and give you a chance. This happens with companies who don’t have sufficient collateral to start up with. Don’t underestimate the power of your community.
Don’t bother with going outside of your community. The larger banks will not give you the time of day. Most large banks only go for the bigger fish in the bigger ponds. Do yourself a favor and save yourself the embarrassment. Your community bank will appreciate you more.