For successful business growth, sometimes you need a small business loan. But what kind? Also, is a loan the best solution to keep your company going? Here is what you should know- and what to do before borrowing for your business:
Figure out exactly how much money you need to borrow for your business- as well as what it will be used for. Borrowing too little or too much can have disastrous results for a new business.
Know What you Are Working With
Be ready to take an honest look at your business’s fiscal health. Before approaching lenders, it helps to know what you are working with. That includes consideration of your financial information, including:
- Credit history
- Credit Score
- Length of Time in Business; tend to require 6+ months in business before issuing loans,
- Monthly Cash Flow
Know that many lenders require that borrowers have been in business for a minimum of six months before they will approve and issue loan funds.
Do your Homework
Do your homework regarding the types of loans available to you, as well as repayment term options, interest rates, and repayment structures, so you find the right fit for your needs. Some loan types include:
- Unsecured Term Loans
- Merchant Cash Advance
- SBA Loans
- Line of Credit
- Secured Loans
- Business Credit Cards
When it comes to borrowing, make sure that you find the loan that suits your company’s current needs in order to survive and thrive.
Narrow Down the Lenders
Additionally, you have various options in terms of lenders. Some to consider are:
- Traditional Banks
- Credit Unions
- Online Lenders
- Small Business Administration, or SBA
The best lender will depend on many factors, including your eligibility, and what you need the money for exactly.
Organize your Documents
You are almost ready to apply for your business loan. Get your documents together and organized, including:
- Personal and business-related tax returns
- Personal and business-related bank statements
- Business-related financial documents, including your cash flow statement
- Your business plan
Get these items prepared now, to prevent delays in funding later.
Is a small business loan the right move for your company? To learn more, talk to the professionals at Crimson Stone Capital Solutions today.