Improve Your Chance of Getting Small Business Funding with These 5 Tips

Regardless of the current economic climate, getting a small business loan can be challenging, whether you’re getting a new start-up off the ground, or want an injection of cash to fund a growing company. Bank loans are nowhere near as popular as they used to be, but the good news is that there are more ways than ever before for small businesses to get funding and several things that you can do to improve your chances.

A Strong Business Plan

Your business plan is one of the most crucial elements that can make or break your success or failure in terms of getting business funding. Whether you’re applying for a bank loan with small business finance brokers ONYX Finance, for example, or trying your luck with crowdfunding, lenders will want to see that you have a clear vision mapped out for the business and a realistic view of what you are able to achieve. Pay particular attention to the executive summary part of your plan, which should describe your vision in one to three pages, and is usually the most persuasive part for lenders.

Detailed Financial Information

When it comes to setting out your company’s current financial position and any financial forecasts that you have, don’t take any risks or cut any corners. Work with an accountant to clearly lay out things like cash flow information, balance sheets, accounts, tax returns, and bank statements. Having all of this information readily available to potential lenders will demonstrate that your company is financially stable and responsible and a low risk to lenders.

Improve Your Personal Credit Rating

In some cases, for example, if you are launching a new start-up, your personal credit rating may be taken into account by lenders. Paying off any recent credit card debt or smaller outstanding loans in your name can help to improve this, along with making sure that any bills or regular repayments are up to date. It might be worth getting your credit report and checking it for any inconsistencies or errors that could affect your chance of getting funding - if you find any, you can apply for them to be removed.

Explore Different Lending Options

Although building on existing relationships is always a good idea, there is no strict rule to say that you need to use your personal bank for business finances, or use your business bank for lending. In fact, spreading your risk across various banks or lenders can actually be a sensible move. And, don’t rely on bank loans - there are plenty of options out there including smaller lenders who focus on start-ups and small businesses.

Know What You Need

There are various different types of loans available to small businesses, so it’s important to weigh up your options and understand what you need and require from financing. Ask yourself a variety of questions, such as whether you need to repay over a shorter or longer period, whether secured or unsecured lending is the best option for you, and whether you can give a personal guarantee if needed.

Getting funding for your small business can be tough, but with these tips in mind, you can improve your chances of getting the cash you need to turn dreams into a reality.