New Business Loans: Helping an Entrepreneur Wear the Hat of a FinancerCommercial Business Loans Michael T Brian
Okay, so you are high on the clouds! You have a great business idea
and you just want to get on with that. You have a business name, you
have the intellectual force, management plan, you have everything.
Well, almost everything. You don’t have the required funds. There is
this major hurdle – raising funds. New business loans can channelize
your business initiative in the right direction. New
business loans are a huge responsibility. A proper new business loans
is fundamental to starting a business and ensuring its expansion.
Raising money for new business will not be possible without proper
information and preparation. The most common source of new business
loans funding comes under banks and credit unions. There is no need to
believe that new business loans are harder to procure. Prepare
written proposal especially if you are looking for new business loans.
Approval of business loans considerably depend on how well a proposal
is written by you. You would not find new business loans if you falter
in your presentation. Every lender will be looking for repayment when
he is making a decision about extending new business loans. A written
proposal will contain general information and details about financial
status. Business name, name of proprietors, with their
social security numbers will constitute the general information.
Details about the new business loan, the amount required, its purpose
and usage will be imperative. Also, mention the nature of new business
you are trying to venture in. Provide some information about your
education, experience, skills and achievements. Your personal financial
statements and of partners will be required. Don’t forget to give
details about the collateral you are offering. New business
loans proposal will be practically incomplete without business
projections. Business projections will include details about how
positive cash flow will be achieved. Give information in the profit and
loss figures explaining income and expense. Provide concrete examples,
easily identifiable from industry standards. Write in a way that can be
described with industry standards and which is easily understandable. New
business loans can be either long term or short term depending on your
financial demands. Short term loans will have a loan term up to one
year. On the other hand, long term loans have loan term ranging from
1-7 years. This term can extend to 25 years in case you are applying
for equipment and real estate new business loans. Entrepreneurs can get
start up business loans ranging from £15,000-£250,000. Some lenders may
be willing to offer more as new business loans. However, you should be
able to prove that you will be able to repay it. An important consideration of new business loans lenders is credit ratings. Credit history and credit score is the single most significant criteria that helps the lender to decide whether to provide the borrower with the loan or not. Many people are practically unaware of their credit score or whether they have a credit score or not. Three major credit scoring agencies – Experian, Trans Union, Equifax – will enable you to find your credit score. Check your credit report carefully and see if there are any mistakes or changes. They can be easily corrected if you happen to inform the credit reporting agency. Credit score above 620 is considered good credit. Anything
below will start having problems finding credit on their terms. Below
540 is considered bad credit. New business loans are available for bad
credit borrowers. But, only few borrowers are willing to work with them
and will come with the drawback of higher interest rates. When starting new business, dedication and passion are not enough. You will find that finances are something without which your skills and efforts will not be suitably translated. New business loans can provide you with the finance that you want and get you the success that you deserve. |
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