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0800 086 9404If you're a small business owner looking for business funding, securing a loan can be a daunting task. There are numerous obstacles to overcome when it comes to securing a loan. From limited assets to a lack of established credit history, these barriers can be difficult to overcome. Luckily, there are ways to increase your chances of securing business finance.
Read ahead for tips on how to break down barriers when it comes to small business loans.
What's Available?
First and foremost, it's important to understand the lending landscape. Do your research to find out what types of loans are available and the criteria each lender looks for. This will help you narrow your options down and make the process of securing a loan easier.
Get an idea of what's out there so you know what to look for.
Try to be realistic about what your business could get. If you've been trading for three months and have yet to start making a profit, and you want to borrow £100k, you may run into a few obstacles. By being realistic about what you'll get, you can manage expectations and not get too ahead of yourself.
Business Plan
Second, make sure you have a business plan in place. This plan should include financial projections, an analysis of your market, as well as a clear vision of your business goals. Lenders will want to see a realistic and well-thought-out plan that speaks to their needs. Also, having a business plan can benefit you as you can refer back to it to ensure you are meeting your targets.
Business plans are not 100% necessary for obtaining business finance, but they don't do any harm.
Documents
Third, it's important to have the right documents and records when applying for a loan. Make sure you have the most recent financial information available, such as tax returns, balance sheets and cash flow statements. This keeps lenders confident that your business is consistent and profitable.
Again, this is something that will benefit you as well. You should always be aware of your financial situation, and this is made ten times harder if you don't have all the necessary documentation to hand.
Good Credit
Fourth, establish a good credit score and credit history. Your credit score is one of the most important factors lenders consider when evaluating a loan enquiry. Make sure to pay your bills, keep balances low and check your credit report to ensure accuracy.
Having and maintaining a good credit score is one of the most important factors regarding business finance, as it is a quick way for lenders to see your repayment habits.
Having less-than-perfect credit isn't the end of the world, however, Love Finance does have options for you. We offer asset finance and card payment loans, which are types of alternative lending that do not rely on your credit score.
Experienced Lender
Finally, be sure to work with an experienced lender. Many small business owners don't know where to start when it comes to finding a loan. Working with an experienced lender can help you navigate the process more easily.
Our account managers at Love Finance provide invaluable guidance and advice to find you the most appropriate business finance option to help you grow.
An experienced lender will make the whole process of enquiring for finance easier.
Summary
Breaking down barriers to securing small business loans can be a challenge for many small business owners. However, by doing your research, having a strong business plan, establishing a good credit score, and finding an experienced lender, you can increase your chances of success. So don't be discouraged – take the time to understand the process, and you can secure the funds you need to jumpstart your business.
