4 things you can do to improve your chances of securing a business loan

4 things you can do to improve your chances of securing a business loan

Financing a business off the ground is no walk in the park. However, there are things that you can do now that will steer your business in the right direction when it comes to getting a business loan approved. Before you go applying for a business loan, these are the four things that you need to know in order to increase your chances of being approved to allow your business to grow from strength to strength.

  1. Have a solid business plan
This might seem like a no-brainer. You need to know your business in and out. This means also means that you have to crunch the numbers to know how much it will take to push it into lift-off. You know the adage, ‘if you fail to plan you plan to fail?’ Lenders see this as one of the crucial factors when it comes to deciding on whether to fund you or not. According to Dynamic business, SME businesses in Australia have the potential of generating $150 billion a year. However, only $77 billion is lent to SMEs in Australia which means only half the market is successful at accessing capital each year. Whether you are a novice to the game or a seasoned business person, any lender will want to see a business plan from you that shows them that they are investing in a business that has a clear vision and realistic view of how they are going to achieve this vision. Your executive summary of the business plan can either hook or sink your chances of getting your loan approved.
  1. Keep a top of the paperwork
Keeping your documents in order can be one of the least exciting things of running a business, but in order to get your financing up to scratch, you will have to keep a tight leash on your paper trail. This means you have to keep an ordered and transparent state of affairs when it comes to your businesses finances. This will help lenders quickly spot where your business is, whether it will be able to generate enough money to pay back the loan, and where the future of your business is headed. It will also convince them that they are not investing in a shoddy fly by night business that can be a huge risk to their pockets. Having your documents in order will ensure that the application process is a smooth one when it comes to approving the business loan. What you need to ensure is that:
  • You keep your accounting records up to date
  • Tax records need to be up to date
  • Hire a professional who will be able to keep your books up to date and balance the numbers correctly.
 
  1. Check your credit score
The only way you can possibly maintain a good credit score that will make potential lenders nod in the direction of approving your business loan is by checking your credit score. You know that score that you keep reminding yourself to check, but somehow slips your mind every time? It will work in your favour if you check this before you apply for a business loan. This will help you spot any holes in your report that might cause future lenders to reject your application. Knowing what will hurt your credit score will also help you know what needs to be fixed. It will also give you time to see how you can build a stronger credit score. Got rejected? Take your time to re-apply for a loan by fixing whatever issues that caused you to be denied in the first place. You can do this by requesting an explanation as to why you were rejected by the previous lender you applied to. Keep in mind that applying for too many loans at once can reflect poorly on your credit score.
  1. Know what type of loan is right for your business
Not all loans are created equal, and not all loans will match your businesses needs. It is crucial that you know what type of loan will best work for your business. Speaking to a broker or a financial advisor that an expert in business loans will help you get a better insight to what type of loan will match your business’s needs without crippling it before it even takes off. Other factors that you can consider before getting a loan are:
  • Do you meet the requirements?
  • How much do you need to borrow?
  • How long will you need the loan for?
  • Will your business be able to afford the interest rate, fees, and ongoing costs that come with the loan?
  • Have you considered the terms of the loan?
  • Will a fixed or variable rate work better for your business?
  Author bio: Bill Tsouvalas Bill Tsouvalas is the founder and CEO of Savvy, one of Australia's leading financial institution. Established in 2010, Bill turned Savvy into one of BRW's fastest growing companies in 2015. He frequently shares his knowledge and ideas on finance, mortgage, money and investment in the media.

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Rated Articles

How your company can adapt to the Digital Revolution

Over the last couple of years, technological innovation has brought about a rapid change in the customer service landsca

LEARN MORE

Will Marketing Automation Help Your Business Grow?

Marketing automation software can benefit your business in a number of ways. It is a great way to increase traffic, enco

LEARN MORE

How CRM Can Maximize Customer Lifetime Value (CLV)

"Keep your customers always on the frontline," this is a key philosophy to running a successful business. Customers are

LEARN MORE

Recently Viewed

4 Key Factors that Will Help Improve the Customer Service of your Company

If you are a business owner, your customers are extremely important to you. They are the ones that provide you with inco

LEARN MORE

Elon Musk is a failure

If you were to ask a business owner "What's your biggest fear?" one of the most common answers you would get is "Failure

LEARN MORE

6 Reasons to Use Content Marketing for Business Growth

Coming up with fresh and relevant content is vital, in order to ensure the success of your business. But in space as com

LEARN MORE
  • Over the past 6 months the incredible team at MMP have supported us to shift our attitude towards our business & month on month our revenue is increasing to the point we will be able to employ additional staff to support our business goals long into the future. Do not regret our decision one single bit!

    • Emma Reece

  • Working with my coach has enabled me to see the areas where my business is failing. This was pretty confronting to me to be honest. MMP has the tools to improve these areas and the guidance on how to implement them.

    • Sharon Robinson

  • I have been working with Max My Profit for approx 3 years now, and over that time I have learnt a lot of things about not only what it takes to run a business, but I have also learnt things about myself. I don't believe i'd be the person or have the business I have today if it wasn't for Max My Profit and our Business Excelerator. Great team to work with if you want to take your business serious!

    • Ben Choy

  • As a new client for Max My Profit (MMP) it has taken no time at all to realise the benefits of business coaching. Despite many years of senior management experience starting a new business requires best practice systems and processes built on a solid platform of detailed planning. I look forward to the benefits of adopting the formula being shared by MMP.

    • Campbell MacLeod

  • Max My Profit Are truly awesome at what they do. They have helped me over the past 12 months to get off the tools in my business and start working on my business. I am looking forward to 2019 with enthusiasm not concern. Thanks so much.

    • Aaron Kemp

  • If you are committed to Growth the Max My Profit Team has the tools and expertise to excelerate all areas of your life. They Care, They Listen, They Understand You as an Individual first then they focus on Your business. Thank you Max My Profit my rating is a 6/5 - Kindest Regards The Mr Handyfix Team

    • Catherine Kavadas

  • The team at Max My Profit are an absolute pleasure to deal with. I love working with a team who is on top of what they are doing and have a clear view of what they are working on with you and helping ensure you get to the end goal.

    • Lauren Watts

  • I have been working with MaxMyProfit over the years and what they do for SME's in growing their business is fantastic. Also due to there knowledge and their supporting material for companies across the 5 lifestyle stages and assisting them through this process day in day out is extremely comforting as a small business owner and have referred them many businesses over the years.

    • Steve Laingy

  • Working with a business coach from MaxMyProfit has been one of the best things I have done for my business. I had several other coaches before MaxMyProfit but these guys are a step above the others. I have seen a significant increase in sales, now have a business that can run itself and the coaching program has paid for itself many times over.

    • Matthew Kitchin

  • Much more than just business coaches. There is an absolute treasure chest of business knowledge in their members site.

    • Iain Campbell

  • Max My Profit are unique as they really partner with you to develop and implement a plan that will drive success for the business. I was hesitant to proceed as previous business coaches tell you what to do and rely on you to implement.

    • Michael de Haan

  • I attended one of Max My Profits introductory events in Melbourne. Having been an accountant for almost 30 years, I was somewhat sceptical. Boy was I wrong. I not only enjoyed the presentation, but I gleaned so much from just that session.

    • Daniel Odd

  • These guys are an absolute wealth of knowledge for Small Business. The programme and support networks they have set up ensure learn more every day and can take your business from good to great. Thanks so much.

    • John Butler