Your small business is bound to need funding to make it into bigger markets. This may sound like an easy venture, but in reality, it can be one of the hardest for your business.
If you are like most small businesses, you have tried to get financing for your business through multiple banks, only to get denied time and time again. You’re are not alone. Because of the recession, many small businesses have been left with poor credit and no where to turn.
Many alternative finance institutions have been formed to cater to struggling small businesses. Before you jump start your small business loan process, answer these 4 questions to ensure you and your business is ready.
- What Does My Business Need?
Although this may seem obvious, this is one thing that many small business owners often overlook. It is easy to be oversold from a financing company. Don’t take more money than you actually need just because it is presented to you. You must determine exactly what your business needs to ensure that you won’t struggle to pay back an unattainable amount.
- What Do I Need Financing For?
Again, this seems obvious as well. Creating a list of exactly what you need a small business loan for and how much of that financing should be dedicated to it will help your business stay on track. By doing this before you have financing will make it clear what you need to do after you get it. This will help better control spending and make repayment easier.
Are you looking to purchase new equipment? Increase the size of your working staff? Catch up with business charges? Whatever the case may be, determine the
- How Fast Do I Need The Money?
When you are searching for financing for your business, you must also consider your timeline. If you are seeking financing for a long term strategy or for a variety of purposes, you should consider the consequences of getting funding from your small business loan in chunks, rather than all at once.
On the other hand, if you are seeing a loan for a piece of equipment that is necessary for daily operations, you should seek out financing company that can get your business the funds it needs promptly.
There are many different types of loans that can help your small business in different ways. By determining the timeline for when you need funding, the financing company will be able to better determine which loan is right for your needs.
- What Makes My Business Different From Others?
Why would you need to ask yourself this question? Some financing companies will ask you to provide a compelling reason why your business is different from others in your industry. This gives them the chance to see why your business is worth investing in.
The financing company does not want to hear the typical song and dance about how your business is the “best”. Create a compelling statement that will give them more of a reason to get you the financing you need. To accomplish this, here’s what you can do:
- Define the quality of product or service that your business offers
- Speak about how your process makes your business unique
- Tell a personal story about how your business helped influence a customer in a positive way
- Finish by addressing your business’s core values and mission
By completing the four steps above, your financier will be able to see that your business is not just looking for an easy out. They will be able to see that your business is in need of funding and that you are worthy of it.
Before you take the plunge into a small business loan, we hope that you answer these four questions about your business. You will be better prepared and more aware of what your business needs to succeed.