How to Prepare for the Application Process of Start-up Business Loan
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Any entrepreneur who is thinking of starting a business should be knowledgeable about the start-up business loan offered by banks or other lending institutions. This type of loan helps in funding small business ventures. Here is a short guide in the whole process of applying for a start-up business loan:
• Consider your eligibility for the loan. Banks and lending institutions have tight qualifications for granting loans to small business owners. You should have the following for you to be considered a start-up business loan:
a. You should have an outstanding business knowledge and experience
b. You should have a good credit history
c. You should have good character references
d. You should be able to offer a collateral
e. You should have a healthy cash flow
f. You should have a good amount of savings
• Consider the present state of the economy. In the past Recession that happened in the United States last 2007-2009, banks and lending institutions significantly reduced granting loans to small business owners due to the crashing economy. The Downturn forced the banks to tighten their belts in funding small businesses and increased their interest rates to sustain the credibility of the bank. Therefore, assess the economy first before taking a loan.
• Be ready to supply all necessary financial documentation to support your loan application. Be sure to be accurate in submitting all these documentation because any misleading information or falsification of documents will lead to the immediate dismissal of your application.
• Be prepared to present your business plan and repayment plan. Have your budget ready and the logistics on how to achieve your goals. By attaching a realistic repayment plan, you can show a great deal of commitment in the repaying the amount that you borrowed.
• Be prepared to wait. The loan application could be a lengthy process so be patient and use your waiting time to do other things for the business.
While preparing for your loan application, you should have a concrete vision of what you want. You should believe in your product that can make your business venture thrive. The business industry is indeed a competitive one, but if you are willing to learn and work hard, you will soon gain that edge and momentum that you are looking for.