Improve Your Chances Of Securing A Small Business Loan
Posted on: 14 November 2018
For many small business owners, securing a loan is the best option to keep their struggling business afloat. Unfortunately, if you've been denied a loan in the past, your business is new, or your cash flow is lacking, there is a chance securing a small business loan will be tricky. There are several things that you can do now to help improve your chances of getting the loan you need in the near future.
Here are a few simple tips to help any struggling small business owner secure a commercial loan.
Fix Errors on Your Credit Report
Improving your credit by paying off old debt, lowering your debt-to-income ratio, and avoiding applying for too many credit cards is a great way to help secure a small business loan. However, if you aren't financially sound, taking these steps can be difficult. Another option to help improve your score is to look for inaccuracies and have them fixed.
For example, if there is an outdated debt you paid long ago, or someone took out a loan or credit card in your name that you did not authorize, contact the credit bureau directly and dispute the inaccuracy. It might take several weeks before the false claim is removed from your report.
Create a Stellar Business Plan
Your business plan isn't only a blueprint for the future of your small business. It is also the way you will show lenders how serious you are about your business and how you will wisely utilize your loan. Draft a business plan that provides a detailed plan for the next few years, including your long-term and short- term goals. Include an executive summary, which is found at the beginning of the document and provides an outline for the remainder of the plan.
Locate a Cosigner
In many cases, securing a cosigner is the best option, especially if your credit score is low and you do not have the financial means to raise it. Choose a cosigner that has a high credit score, stable employment, has collateral, or is a fellow small business owner. A family member or close friend is another option for a cosigner. The cosigner is responsible for making any loan payments, fees, or fines if the borrower defaults.
Securing a small business loan can be tricky, especially if your business is new or you haven't established yourself in the community. Luckily, there are several things you can do as a small business owner to improve your chances of securing that much-needed loan. Contact someone experienced in flexible commercial lending for more information.
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