Starting your own business is incredibly exciting. It gives you a great chance to do your own thing, make your own money and run your business your way. The growth of the internet and online business means it’s much easier than it’s ever been before. You only need a good idea and a plan to get started. If your business model is solely online, you don’t even need premises and could start out of your home. But, you might still need some startup capital to help push your business forward and make it a success from the very start. Even if it’s just a small loan to help you to market your company it can make a massive difference.
But, it can be hard to get a small business loan if you’ve never done anything like this before. Banks want security. They like to know that they’re lending to a safe bet and if you are new to business, it can be hard to prove. Here are some tips to help you secure that first startup loan.
Sort Your Personal Finances
If you’ve got no business experience, banks have only got your personal finances to look at when it comes to assessing how good you are with money and making a decision. So, you need to make sure your personal finances are in a good position. If you are in debt, focus on creating a plan to pay them off, perhaps switching to a balance transfer card from best.creditcard or taking out a loan to consolidate your debts. Then, prepare a household budget, cancel any contracts that you don’t need and curb your everyday spending to improve the appearance of your bank statements.
Repair Your Credit
Whether you are borrowing personally or for your business, the lender will perform a credit check. So, check it yourself first. Take a look at your report, appeal anything that you don’t think should be there, cut your applications, and find other ways to repair poor credit. A good credit report will also help if you need to make business purchases on credit or take out contracts with suppliers.
Prepare a Business Plan
A business plan is a crucial tool when it comes to borrowing startup cash. It shows that you know what you are doing and have done your research. That you are taking your business seriously and that you are willing to put in the time and effort to make things work. Your plan should include long-term goals as well as detailed plans on how you are going to get there.
Complete a Financial Forecast
A financial forecast is equally essential. This looks at how much money you are going to spend and how much you are likely to make. It looks at changes in the market, exchange rates and future predictions as well as things like import costs, overseas sales forecasts and market stability. It shows that you’ve got a plan and that you understand the financial workings of running a business.
Find Investors
In the ideal world, you’d borrow as little as possible. If you haven’t got enough saved yourself, it can be a good idea to pitch for investors before you ask to lend money. Your business plans and financial forecasts will help here too.