As a small business owner, you will inevitably need to borrow money at some point or another. When you need one, your ability to get a small business loan will be extremely important to your growth and perhaps even the survival of your business. If you have not had to do this in the past, you should take some time to do the research now so that when the time comes you will not be caught flat footed.
First of all, you need to be aware of what your options are. There are many different types of business funding, many of which may be available to some but not others. And in the past several months, the economy has showed signs of improving, which will inevitably increase business owners' borrowing power in the upcoming months. It's important to look at your own business profile to get an idea of what your own borrowing power actually looks like.
Your credit score will be a major influence on this. It's worth the investment in a credit monitoring service, especially if you do not know what your credit score is. It may cost you 10 or 20 dollars now, but you'll find out a lot about your ability to borrow in addition to what it may cost you when you end up pulling the trigger. Plus, if you have a bad score and you catch it well before you need to borrow, you'll give yourself valuable time to address and fix the problems. Fixing your credit score, or taking steps to improve it, can save you thousands and thousands of dollars in interest and finance charges.
The next big impact on your ability to borrow money will come from your business cash-flow. Bank underwriters will usually have a very different assessment of cash-flow than the owner of the business will. This is because you know your business very well, and understand that just because your account goes negative it's not the end of the world. It may look like you don't know how to manage your cash-flow, even if you had the money sitting in another account and just forgot to make the transfer. Sometimes things that appear to be cash-flow problems to a third party may just be timing issues in when you receive your payments compared to when your checks get cashed.
There are other steps you can take to prepare yourself for the inevitability of the fact that you'll need to borrow money at some point or another. Some of it can be done on your own time. Running a business can be exhausting and extremely time consuming, but you need to take some time for these things. If you get a great opportunity and need a small business loan really quickly, these types of issues can cause big problems for you at the bank. It will be well worth it for you to spend the time on these things now rather than later, when it really matters.
First of all, you need to be aware of what your options are. There are many different types of business funding, many of which may be available to some but not others. And in the past several months, the economy has showed signs of improving, which will inevitably increase business owners' borrowing power in the upcoming months. It's important to look at your own business profile to get an idea of what your own borrowing power actually looks like.
Your credit score will be a major influence on this. It's worth the investment in a credit monitoring service, especially if you do not know what your credit score is. It may cost you 10 or 20 dollars now, but you'll find out a lot about your ability to borrow in addition to what it may cost you when you end up pulling the trigger. Plus, if you have a bad score and you catch it well before you need to borrow, you'll give yourself valuable time to address and fix the problems. Fixing your credit score, or taking steps to improve it, can save you thousands and thousands of dollars in interest and finance charges.
The next big impact on your ability to borrow money will come from your business cash-flow. Bank underwriters will usually have a very different assessment of cash-flow than the owner of the business will. This is because you know your business very well, and understand that just because your account goes negative it's not the end of the world. It may look like you don't know how to manage your cash-flow, even if you had the money sitting in another account and just forgot to make the transfer. Sometimes things that appear to be cash-flow problems to a third party may just be timing issues in when you receive your payments compared to when your checks get cashed.
There are other steps you can take to prepare yourself for the inevitability of the fact that you'll need to borrow money at some point or another. Some of it can be done on your own time. Running a business can be exhausting and extremely time consuming, but you need to take some time for these things. If you get a great opportunity and need a small business loan really quickly, these types of issues can cause big problems for you at the bank. It will be well worth it for you to spend the time on these things now rather than later, when it really matters.
About the Author:
The easiest way to get the best rate on small business loans is with Small Business Loan Options. It's fast, easy and secure, plus you control how many lenders they send your application to.
No comments:
Post a Comment