Tips to Improve Your Odds of Getting a Small Business Loan

Getting a small business loan may be the only viable option that you have to obtain the money that you need. You have probably heard how hard they can be to get sometimes, though. Which makes you wonder if there are any things that you can do to improve your chance of success. The answer would be “yes”, there are numerous ways to improve your odds. Let’s go over a few now so you can get started on improving your odds of getting a small business loan.

Solid Business Plan

The lender that you choose to go through will want to have a look at your business plan. If you do not have one, it is time that you make one. Even if you have been in business long enough to show that you are profitable, you will still need to show the lender what your short- and long-term goals are, and how you plan to take your business to that point.

Make sure that you include as many details as possible. Do your homework and get some figures from your competitors. The ones that have made a successful business from the ground up. If they are not afraid of a little competition, they might even take the time to talk to you and give you some advice. If they do, take it, because a lender will like the fact that you are modeling your business after one that has already shown how successful they can be.

Improve Your Credit

If you have ever dealt with financial institutions, you will know the number one thing that they all look at. That is your credit score, and your credit history. If you already have an established business, you will be able to use your business credit history, which is simple to improve. If not, you will be required to use your personal information. Some business loans in Australia may even want to use both, so you need to work on each of them.

One of the simplest ways to improve your history is to make your payments on time. That includes any loans that you already have, any revolving debts, and your monthly bills. Pay them on time, and always fork over the amount that they want as a minimum, or even more if you can. Another great way to boost your numbers is to get a few business cards. Do not spend over 30% of the limit and pay them off monthly.

Be Professional

This can be a slippery slope for anyone involved, but the truth is that the lender that you talk to will judge you on your appearance, your attitude, and your body language. There is an old saying in the business that you need to “dress for success.” This does not mean that you need to rent a tuxedo or gown, and you do not have to dig out your best set of clothes from the back of the closet. You simply need to have nice clothes on, be showered and groomed, and be confident. If the lender senses, or sees, that you are not motivated and positive of success, they will find a reason to deny the business loan. 

Final Thoughts

The tips listed here will help you get a business loan, but they will not guarantee it. Keep in mind that every lender will have their own guidelines that they follow when handing money out, so if you are denied by one the next choice may jump at the chance to help you. You also need to remember, though, that when applying for a business loan they will check your credit, which will give you a hard hit that reduces your number. 

If you are applying for more than one, do them within 30 days of each other. Many times, this trick will prevent you from showing more than one hit because it will be wrapped up into one hit, rather than multiple ones. 

Originally posted 2022-03-15 22:23:23.