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How to choose a loan that is best for your business

StrategyDriven Managing Your Finances Article|Business Loan|How to choose a loan that is best for your businessWhen your business is in dire need of a financial injection, you might be tempted to apply for the loan in haste. People do that all the time not realizing the golden rule that “haste makes the waste”. By the time reality shakes them, it is often too late. They can’t do anything but bear with the scary consequences.

Smart businessmen take their time before stepping into this extreme decision. Because they know it can make or break their years of hard work. You should also take a leaf out of their book and choose the loan by carefully evaluating the following angles:

Be Crystal Clear About Why You Need a Loan

That’s the first and the most critical step at the same time. It is very important to have clarity about why exactly you need the loan because the choice of your loan will be based on that. Understand, there are different types of business loans for everything.

For example, account receivable loans might not be an ideal choice to tackle issues other than cash flow. Similarly, if you want to buy office equipment, you will have to stick to the loans which are modeled according to this very need.

The takeaway message being, you should nail down the precise reason and purpose of the loan otherwise you will lose your way in the cobweb of multiple choices of lenders.

Consider the Duration of Getting a Loan

Well, some loans take more time in approval than the others. At times, businesses foresee the need for a loan and apply beforehand to avoid any delays. However, sometimes we are met by emergencies or it is simply not convenient for us to wait for weeks and need the loan in a matter of a few days. In such cases, fast loans swing into actions.
It is pertinent to mention here that if you have a good record of previous loans, you can save a few bucks on fast loans. However, generally speaking, these loans come up with easy and flexible process but they are comparatively more expensive.

For example, factoring is one of the main types of fast cash. But there are multiple factors will affect your invoice factoring rate such as your industry, size of invoices, creditworthiness and so on.

Estimate the Amount Needed

It is equally essential to know how much money you actually need. Many people apply for the loan just to get as much money as possible. This approach is sure to backfire in the long run.

Even if your documents are in good shape and you can easily be qualified for the bigger finance, still you should not transgress the amount you need. Because businesses have their ups and downs so why take a risk that does not make any sense?

That being said, you should also not apply for an amount so small that you become cash-strapped in the middle of a project. Therefore, be watchful while calculating the costs of your assignment. To be on the safe side, consult an expert who can estimate the right amount for you.

Shop Around

Once you are done with the above steps, it is time to seek a lender. The majority of the borrowers tend to settle for the nearby lender. Just because it saves them time and energy. That’s a non-starter. The best way is to shop around and compare rates.

Better still if you ask for suggestions from your friends. Being affiliated with a trustworthy lender comes up with a cushion.

The Last Verdict

It is important to qualify for a loan but it is even more important to get a suitable loan – the loan of your liking. There is no use of getting a loan that does not seem fit for your end goal. A bad choice of financing is more likely to haunt you in the big scheme of things.

Asking For Help For Your Business

StrategyDriven Entrepreneurship Article |Business Advice|Asking For Help For Your BusinessUnless you’ve gone into business with a partner, friend or relative, then you’re going to be feeling like you’re a little bit alone in your new business. Rome wasn’t built in a day. However, you must ask for help whenever you need it, whether that’s hiring the right people for the work that you need to do within your business. Or whether that’s asking a relative to pick up the kids from school once or twice a week while you can get your work done. You do not want to burn out in your first year of business, so here are some ways in which you can get help, stay ahead of the game, and ensure the best results for you and your business.

Advice

This is likely going to be something that you would’ve thought of before you even start your business, you have no doubt completed your market research, spoken to people in your field, and maybe also completed courses and online training. But once you’ve started the business and you’ve begun to realise where your weaknesses, and strengths are. You can then begin to speak to people to find out about specific help that you can receive for yourself and your business. Don’t forget many people before you would have started businesses and come across all sorts of obstacles. So it makes sense to be able to draw from their advice and their experiences. Not everybody is going to want to help of course, but if you ask around speak to people in Facebook groups, go to networking events, and find people that are happy to help you along the way. You will find you’re in a much better position. No matter where you are in the world, there will always be somebody, either a friend or relative or an organisation that has been set up purely to help new businesses.

Home

You really don’t want to get the balance wrong between your home and work life when you set up your business. It can be easy to become submerged in everything that you need to do to reach your goals. But if you’re working too late or you’re not keeping up with the basic how’s work, then you may need to reassess what you’re doing and when. It doesn’t hurt to hire people to do certain things for you, such as cleaning, or making sure that your shopping is delivered on time. If you’re keeping everything running smoothly, how are you doing that is entirely up to you. There is no shame in asking for help from friends or family on occasion either.

Finance

Asking for a bank loan isn’t just about not having enough money or bad management. Having a cash injection at a certain point in building your business will ensure that you’re able to reach your goals quicker. If you talk to the bank and they give you a low-interest rate then as long as you aren’t paying a tremendous amount of interest, this can be an excellent business decision. It can feel like you’re asking for “help“ however, it is a business transaction like any other. It isn’t difficult, and you can even use websites that compare business loans, and give you all of the information that you need to make the best decision for you and your business. Marketing can cost a lot of money, especially at first, so people do put a large budget towards this, especially when hiring professional services such as a marketing consultant. Depending on your business type, you may even need to hire a consultant for the business side of things such as cannabis consulting nationwide, of course, this goes into your budget as anything else. And you must consider your finances carefully when making such decisions.

Staff

Various different businesses have different needs, but essentially most need a team of people, some companies only need one or two people, and some businesses need a large team even to get the necessary work done. This would have all been in your business plan to start with, but it is essential to make sure that you have the correct people in the correct places. Hiring staff isn’t necessarily asking for help but making sure you have the right people that can help you; it’s going to make your life a lot easier. Training the staff and making sure that they are comfortable and happy in their role will undoubtedly help you in the short and long term. A lot of staff members who feel appreciated and cared for will go over and above and also go out of their way to help you.

Outsourcing

Certain aspects of running a business, will be time-consuming and not always easy for you to get your head around it first, that’s not to say you can’t get them done however it’s still good to outsource certain aspects of the admin. To free you up to do more important things within the role. An accountant is usually the first thing that people choose to outsource, finding a great accountant can be a lifesaver, ask around and find out who people recommend in your local area, and see if they can provide you with excellent bespoke service too!
Other things people tend to outsource our social media management, web design, graphic design, marketing and unless your business is created based then most of the creative side of the company is headed up by someone else.

Once you overcome the initial fear of asking for help and realise it isn’t actually feeling it’s just making sure that you’re able to keep on top of everything, then you will find the help and support comes from various places. Do you want to help people yourself in the past and being able to return the favour is something that most people are keen to do, so let them have the chance to repay you, and don’t see accepting help as any sort of failure. The best business people have a great team of support and are thriving because of it.

Fund Your Dream Company! How to Get a Business Loan Without Fail

StrategyDriven Starting Your Business Article |how to get a business loan|Fund Your Dream Company! How to Get a Business Loan Without FailNo matter what your reason is for starting your own business, you’ve got to figure out how to fund your business. Unless you’ve got a nice nest egg and are ready to part with it, you probably need to learn how to get a business loan.

Many small businesses take out business loans to get the capital they need to start up their business and even pay for day-to-day expenses. Don’t get overwhelmed with the thought of taking a loan out.

Continue reading this article to learn about getting a loan to help you get your business off the ground and flying.

The Simple Truth About How to Get a Business Loan

Getting small business loans or other types of loan for your business doesn’t have to be daunting. After you read these tips, you can go through the process without worrying.

You don’t want to apply for a loan before the lender will approve your request. The more requests you have on your credit, the more of a risk it makes you look like.

Determine Why Your Business Needs a Loan

Lenders aren’t going to take “because I want it” as a good reason for why they should lend you money.

Before you speak to a lender, you need to have a solid reason why you need this loan. The more specific you can get about the reason why you need the loan for your business, the more likely the loan officer will see your vision for your business.

How Much of a Loan Can You Afford?

You shouldn’t decide to take out a loan for as much as possible. Before applying for the loan, you should know how much of a loan you can afford.

If your business cash flow isn’t enough to cover the loan repayment, your business and you could come into some serious problems. You should check to see when loan repayments are expected.

Some companies require that you repay them every month and others even require that you repay them every two weeks. Make sure to check the terms so you know when your payments are going to be due as well.

Create a Solid Business Plan

When you were going through the reason that you needed the money for your business, you likely had to work on your business plan. The more solid your business plan is, the more comfortable a lender will be with loaning you the money.

Depending on what you need the loan for, the loan may have different terms. Write out what you foresee happening with your business. You shouldn’t leave out any important details or numbers that will back up your plans.

What Is the Current Financial Status of Your Business?

If your business is already in operation, it will be easier to get the loan. When your business is already in operation, you have some proof that you know how to do business.

Before applying for your loan make sure that your credit history is as spotless as possible. Lenders are likely to review your personal credit history and that of your business as well.

If you look at your credit report and see there are errors or old debts that haven’t been deleted, you need to request to have them taken care of right away. If you have derogatory items on your credit report it will either cause the lender to deny you or charge you a much higher interest rate.

Besides for your credit report and score, lenders are also going to look at your business cash flow. If you have a strong cash flow then lenders feel confident that you’ll have the means to pay the business loan back according to the agreed-upon terms.

If your credit history and cash flow aren’t enough to get the loan, you should look into what collateral you have to offer. If you have something that will secure the loan, the lender is more likely to trust you with their money. If you don’t pay the money back then they get whatever it is that you put up for collateral.

Look at Your Lender Options

Don’t let loyalty keep you broke. It is important that you look at multiple lenders and see what kind of rates they will offer you.

Even if you’ve done business with a certain bank for years, you might check with online banks and see if they have better rates. Since online bank’s overheads are lower, it is easier for them to offer lower interest rates to their customers.

Prepare All Necessary Paperwork

Putting all of your necessary paperwork together can take quite a while. Make sure you don’t miss any important forms or your loan may be delayed or denied.

If you’re getting a USDA or an SBA loan then you might need to fill out paperwork for the government as well as for the lender in question.

There may be some differences in the loan application process but generally, you’re going to need to include your business plan, financial statements and also your cash flow information.

You may need to provide further documentation if what you provide is deemed to be less than satisfactory.

Learn More About Business & Leadership

Now that you know how to get a business loan, you’re good to go and ready to launch and/or grow your business. Why stop learning now?

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