Debts can either
be good or bad. Business loans are considered good debts if you are using the
funds to start up a new venture, replenish your cash flow, stock up on
inventory, or to keep your existing one afloat. If you need to secure a
business loan, first there are some things you need to take into consideration
to ensure that your application gets approved.
Compliance with loan requirements
If this is your
first time applying for such loan, you must have a complete list
of requirements that you must submit so you don’t have to go back and
forth. Have everything required ready when you decide to go to a bank. It may
take time to complete everything the bank is asking you, so be ready to accept
some setbacks. Set a realistic timeframe.
guaranteeing personal possessions
owner has a vision that their business will succeed, thus they will guarantee
their private properties, such as their house, car, or other properties. If you
are a solo business owner, this may be inevitable. But if you have partners or
the business is a corporation, it is best to avoid using
private properties as collaterals. If the business fails, private
properties will be sequestered. It will give you peace of mind knowing that
even if the corporation fails, private properties will be safe.
Get help form
If you are a
small business owner in this time of COVID-19, the government hands out
assistance to small business so they could keep afloat. A lot of business
closed due to the pandemic; do not let your venture go down the same path. The
Small Business Administration or SBA can help you finance your business during
this difficult time, so that when the economy fully reopens, your employees
will still have a job to go back to, and you can still keep your business
Talk with a
business loan is a legal binding, and if you do not have the right
knowledge, it can be your downfall. Consult a lawyer who is an expert in the
field so you can have the leverage when you apply for a loan. You cannot go
into a contract with a creditor if you do not know the ins and outs of the
transaction. Also, do not make any commitments and put them into writing
without consulting first.
rating will be an integral part of a business loan application. You have to
have a reputable credit rating so that creditors will have an assurance that
you are capable of paying back what you will borrow. Building your credit
rating should start as soon as you get your first job. It is not an overnight
process. Be responsible in your finances even when you are young, so that when
you decide to go into business, it will be easy to secure a business loan.
Study how your
business can keep afloat despite of setbacks – especially financial ones – and
do not be disheartened by rejections. Make sure that your business’ financial
status is always in good condition.
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