Acquiring a loan is often the biggest the challenge for a new business. Lending has become far more restrict since the financial crisis, making it even more difficult for small businesses and start-ups to secure the funding they need to succeed.
The process can be arduous, so be sure to consider the following points before applying for a business loan!
Why do you need the loan?
A lender is always going to ask you why your business needs a loan, so be sure to think carefully about this. For instance, is it needed to establish the business in the first place or are you looking to further expand your current business?
Are you eligible for the right loan?
Most new businesses struggle to get a loan, as you need an income to display to a lender to show that you can afford to repay the loan in the first place. Therefore, most start-ups wonbt be eligible, so will need to secure another form of credit in the meantime or apply for a start-up business loan from a specialist lender.
Is your income high enough?
Those looking for a business loan will obviously need to repay it, so always make sure your income is high enough to make all payments. Plus, when applying for a loan you need to show a lender the details of your income, including gross profit, cash flow, assets etc., so itbs worth clarifying as early as possible to see if you can get a suitable sized loan.
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