Small business exists on the very edge of the economic precipice. At any moment and with any fluctuation of the market place and economy, it could either crash violently into the valley below or hang on – in some instances it could be pushed just far enough back to where its safe for the foreseeable future. However, in order for a small business to get to this point, it might need a loan to increase cash flow. Cash flow is the lifeblood of the small business. It allows the company to fill orders and meet demand. Here are 5 ways to boost your chances of getting a small business bank loan.
- A bank is looking for a track record of success. Not only do they want to see a healthy credit score, but also that a business has a history of being more in the positive than the negative. In most cases, a bank wants to make money out of giving you a loan. This might seem backwards, but in the long run they will make their money off the interest rates. A bank is way more likely to give a business a loan if they know they will not only make their money back, but also make a few bucks more.
- Also, it is important to get inside the mind of a banker or lender. A banker or lender, when considering giving a loan to a particular business, will evaluate the market place to see if the there is a realized or applicable risk. If the risk is too high, no dice. However, if you can think a few steps ahead on a few ways to avoid some of the more common pitfalls and have a back up plan, the less of a risk your loan will be.
- Another way to boost your chances of getting a loan is to not only have one or two ways of paying back the loan, but up to five ways. The more ways you have to pay back a loan, the more a banker or lender will be inclined to accept your loan application. You could also offer collateral to back up the value of the loan, like a car or a even a house, but you really have to be willing to doing anything for a loan before you take this step.
- Compare rates. Just like you would search “Ratesupermarket.ca mortgage rates in Canada” to find a website to compare mortgage rates, you should also do the same to look for your small business loan. In order to find the best rates, you need to be able to find the best one that works for your business. In addition, you want to find a small business loan with the lowest interest rates. Comparing different loans is your business’ best bet of getting the best loan for your company.
- Lastly, it might help your chances of getting a loan if you get to know your banker personally. If you do business with a particular bank, the more you can develop a relationship or even a professional friendship with a representative at your nearest branch, the more you’ll boost your chances of getting approved for a small business loan.