Business Loan: What are the Essentials?
You can vividly envision it by now.
You get to be your own boss and enjoy all the amazing perks running your own business has to offer.
However, you are confronted with one major dilemma—you don’t have the slightest idea where to get the needed funding to get your venture off the ground.
If truth be told, it’s a dilemma common among many entrepreneurs.
Fortunately, there’s business loan.
What is a business loan?
Essentially, credit (typically in cash form) provided by a creditor that is paid over a period of time is called a business loan.
Banks, alternative funding sources, community finance institutions, and even family and friends can be possible sources of business loans.
What are some of the enticing benefits of business loans?
They are easy to obtain.
Any business, regardless of size can definitely benefit from business loans given they are used the right way.
Fortunately, getting a business loan especially nowadays is easy.
For starters, entrepreneurs now have access to numerous creditors who are willing to provide loans to businesses with a stable income and a good credit score.
You get to keep business control.
By far one of the most alluring benefits of a business loan is the ability to retain control over your venture.
In other words, creditors won’t be able to dictate how your business is run.
They are not also entitled to any of the profits your business will earn.
You will not be required to repay the loan on demand.
Basically, when it comes to business loans, your primary obligation is to repay the amount agreed upon.
In some instances, money that goes into paying interest for loans are deducted as business expense (for tax purposes).
This can be very beneficial for many business owners as they can plan payments ahead of time and not worry about being asked to pay at any time.
How can you maximize your chances of getting approval?
If you want to apply for a business loan, you have to find ways that will help increase your chances of approval.
The following pointers should get you off to a superb start:
Make sure your accounting records are favorable.
Akin to a business plan, your accounting records will provide prospective creditors with a very clear picture of your company’s latest financial standing.
Understandably, you can also expect lenders to evaluate your balance sheets, income statements, cash flow statements, and the like to gauge your company’s current financial health.
You can also expect creditors to look at your gross sales, debt ratio, and profit margin, among other things.
In line with this, it is recommended that you keep your books updated at all times so you’ll have a bigger chance of getting your loan application approved.
You need to make sure you are able to complete all the application forms.
True, it may seem like a given but unknown to many, a lot of loan approvals has been delayed because of loan forms that have not been filled out completely or properly.
More often than not, borrowers that have all the needed documentations handy and loan applications all filled out have a relatively higher chance of getting approval.
You can also expect the approval time to be a lot faster.
While not exactly rocket science, applying for a loan can seem overwhelming, especially for first timers.
However, it is reassuring to know that as long as you do the necessary preparations as well as the legwork, you are already a step closer to getting that funding you need to get your business off the ground.
Do you need a business loan to further fuel business growth? If so, please visit www.capitalize.com.sg.