1. Do your research
Quite simply, different lenders have different criteria as to what they consider a feasible finance plan. Take the time to research specific institutions and find what is ideal for your specific needs.
2. Develop your business plan
A strong business plan is a necessity; it is the backbone and starting point for any business. Make sure your projections are realistic, exhibit an understanding of the market and indicate a willingness to adapt as the situation demands. There is no substitute for raw numbers.
3. Demonstrate your needs
It cannot be understated what a marvel modern technology is and the large advances that have been made in the past few years alone. Social media and the internet are integral parts in everyday life and not exploiting this puts you at a significant disadvantage. Facebook, Twitter and LinkedIn are only some of the outlets you can use to expose your business; there is simply no excuse for neglecting them.
Validate your belief and you will be able to repay your debt. Instil confidence in the lender that your business is a viable outlet and you will be able to meet the requirements.
5. Independent is key
Independent brokers can go a long way to successfully getting finance. They have a fundamental understanding of the requirements for getting approval. Brokers will be able to help you throughout the process and with many of the tips above; they offer professional expertise and experience that is invaluable.
Be upfront with your current situation and the money needed; underestimate revenues and overestimate expenses. Being transparent with the lender is likely to boost their confidence in your reliability.
7. Read the small print
Understand the repayment plan. You should aim to repay the loan as quickly as possible. You don’t want to be caught in a situation where your repayments drag out for several months longer than you are prepared for. Sometimes a more expensive loan with flexible terms is a better alternative to a lower APR.
8. Be aware of your credit history
All lenders will study your credit history with intense scrutiny. Check your track record and be prepared to address any concerns the lender may have.
9. Build relationships
It’s often simpler dealing with an institution that you have previously worked with. They will be more comfortable financing your business with prior experience; accumulate contacts through networking that could potentially help you out in the future.
“No” isn’t always the end of the road. If you are declined financing, make sure you understand the reasons why. This will help you adapt and modify your plans, leading to a more likely positive outcome in the future.
We are a market leader in accountancy and taxation services for SMEs and entrepreneurs and have produced this guide for anyone in the initial stages of starting a business. It’s commonly known that 50% of all small businesses fail in their first year and 80% of entrepreneurs fail within the first 18 months. As Accountants we have been able to implement tax planning and financial arrangements for our clients so that they can continue to run and develop their business. You can find out more about what we do on our website and feel free to call us if you need business advice or accounting services. www.aims.co.uk