Your personal life may be easy to finance and keep on top of. For example, you may take out a short term loan in an emergency to help resolve any woes. But when it comes to financing a business, this may not be an option. Instead, you may need to take out a business loan or request a business credit card. Both of which have a slightly different application process from a personal one. Here’s how you can successfully secure finance to grow your business.
Grow Your Credit Score
Not only do you have a personal credit score, but your business will have one too. When applying for finance, this credit score will be checked, and it can affect the outcome of your application.
There are simple ways to grow your business credit score, such as using a company credit card to make small purchases day to day. Then once a month you pay off any arrears in one go to bring the balance back down to zero.
This not only demonstrates your ability to make repayments but will help your score increase quickly.
Know Your Business
When you apply for a business loan, you may be asked a lot of in-depth questions pertaining to your business. You’ll want to be prepared to answer any question thrown at you, whether it’s related to your net profit or your long-term goals. Don’t be afraid of presenting the unique selling points of your business too.
You need to make it clear that you’re a viable venture and that you’ll utilize the finance to the best of your ability. Knowing your business inside and out will demonstrate your dedication to making your company work and means your application process will be a breeze.
Demonstrate Good References
You may be asked to provide references when applying for business finance, so it’s always good to ensure you have strong relationships with others that you may work alongside.
You might work very closely with a large supplier, so their character reference could do wonders for your application.
Similarly, you want to show you have a committed team behind you. If you’re just starting up, you need to be your own champion and show your hard work and dedication.
If you have employees, you want to be able to show how they’ve strengthened your business and how you plan to invest in them with your finance.
Don’t be overzealous when applying for business finance. Plan out exactly how much you’ll need and what it will be spent on. Having a sensible finance goal will show your lender that you’ve thought about it realistically and carefully.
If you’re asked about the value of your business, don’t overcompensate to try and secure higher finance. But at the same time, don’t undervalue yourself either. Know your worth and you’ll feel confident when answering this question.
Ultimately, there’s no guarantee that you’ll be approved for the finance that you apply for. But with careful preparation, you’ll give yourself the best chance possible.