In business, you will find that there always will inevitably come a time as a business owner, you are faced with the decision to remain steady, shrink or grow. It usually comes about when you are ready to rip your hair out, from becoming increasingly busy and find it difficult to juggle the amount of business you are bringing in. At this point you will have to make the decision, whether to scale back or forge ahead growing your business.
If at this point you choose the latter, you will soon find that it takes not only the will to move your business forward, but also a financial investment. You may even find that the investment is more cash than you have on hand, or it may force you to dip into your reserves more than your comfortable with, which leaves you asking, what next? A financial loan may be the solution to your problems. There are a few considerations however, before you contact your local bank or lending institution and ask for a loan.
The first step to obtaining a loan is to have a plan.When you go to ask for the loan most lending agencies are going to want to see that you have a well thought out plan of how you will be investing the money that they are lending you. They do after all want to be confident that you will be successful, which ensures them that they will see a return on their money. Your plan should resemble the business plan you had when you started your business, in the sense that you should have a direction, goals and strategies to reach those goals.
After you have created a plan you need to take a look at your financial status.This is where you must run the numbers and come up with figure you are comfortable borrowing, as well as a payment you are capable of paying back per month. This is also a time to take a look at your credit score, fix any errors that may hurt your chances of securing the loan.
Now that the prep work is done, it’s time to find a lending institution that fits your needs.Shop around, different institutions and/or credit unions have various rates and programs. Do not be discouraged if you are turned down by the first agency that you go to. Today there are many institutions that are specifically designed to lend money to businesses. I emphasize institutions, as banks are becoming more stringent on loaning money to companies, and you may find it easier to secure your loan through a credit union or online companies such as, Kabbage, OnDeck, LendingClub, Fundbox, or Bluevine.
When you make the decision to grow, be sure to do your homework and be comfortable with the amount you are planning to ask for. Have a plan and be ready to stick to it, giving your growth structure and stability, keeping you moving forward.