5 Key Strategies to Help You Get a Business Loan

When you are preparing to apply for a business loan you need to spend time on what we believe to be the five key strategies.

These strategies are designed to boost your chances of approval, so you can finally obtain the cashflow for growing your business or putting some systems and processes in place to ultimately boost business, or perhaps you need to employ a key person to help grow the business. So, let’s look at the 5 key strategies to employ:

1. What would a lender think?

This is where you take off your business owner hat and put on your lender cap!

Even though requirements do vary from lender to lender there are some common requirements which include:

• assessing the risk of taking on the business loan
• ability to make repayments
• cash flow of the business
• security available to hold against the loan in the event you are unable to pay back the loan

It is worth taking the time to work out what security you do have and if it will be sufficient. Ensure you know the ins and outs of the cashflow of your business and get realistic about what repayments you can afford comfortably.

2. Be realistic about what you can borrow

When you apply for your business loan, first and foremost the lender will want to know what the funds are going to be used for. In their minds they are wanting to know how you will generate income from the funds they are lending you.

Realistic is the key word here. Be realistic about the amount of money you apply for and have given a detailed account on how the funds will be used.

For instance, if the funds are going to be for getting a new product into the market you need to be able to provide a projected plan from creation of the product through to the price and what you are predicting to make from the sales of the product.

3. Have a plan in place

How is your business plan? Do you even have one? Let’s be honest, it isn’t uncommon for businesses to be started on a whim rather than with a detailed plan.

If you don’t have a business plan get one! The plan is something that the lender will rely on when assessing your business loan application. It will provide them a background on why you do what you do, how you do it and most of all income earned and projected income.

4. Is your credit report accurate?

Have you checked your credit history via a report lately? Were you aware that if you were late on a credit card payment it could be recorded on your credit report? Or that if you were knocked back for a recent loan that would be recorded? Even the lay-by system After Pay can show on your credit history as it is treated in a similar way to credit cards.

To ensure a smooth process it is a good idea to obtain a copy of your credit history, so you can get to work on removing anything that shouldn’t be there and ensure it is up to scratch. And if not, it may not be the right time to apply for the business loan.

5. Have a back-up plan

You need to be prepared for the fact your business loan may not be approved or you are offered a reduced amount.

Lender’s will want to see that you have a back-up plan in place especially if they are considering approving your business loan for a lesser amount.

Also, they may want some form of collateral – an asset you own that could be used to pay off the loan in the event you default. This is something you need to treat with special care as the form of collateral they may need is your home and that is a very big asset to put on the line.

Overall

We know all this can feel overwhelming but our Brokers here at Financial Network Group are here to help you pull all the information together, talk you through the steps and see you through the process of applying for a business loan from end to end.

ABOUT TERRY KYPREOS – FINANCIAL NETWORK GROUP

Terry Kypreos is a Melbourne based finance specialist passionate about working with clients to achieve their lending goals. He helps his clients to strive for and achieve their financial potential. Priding himself on getting his clients the very best outcomes for their specific circumstances, he often starts working with client as early as they start saving and planning for their future, not just when purchasing. His expertise in home loans and investments finances, along with self-employed clients, is paramount for providing the best outcomes and faster service for his clients.