Choosing A Better LenderChoosing A Better Lender

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Choosing A Better Lender

A few months ago, I realized that I simply couldn't borrow money from my parents anymore. In addition to tapping the resource dry, they were also starting to look a little uncomfortable anytime I was around--even if I wasn't asking for cash. I realized that my financial problems were my own, and that I shouldn't rely on my parents to keep bailing me out. To fix my finances once and for all, I decided to look into choosing a better lender. I found a great bank in town that felt comfortable lending me the money, and they were nice to work with. This blog is all about knowing what to ask and how to choose a lender.


Tips To Help You Get The Small Business Loan You Need

New year, new beginning, and a time to try and take your small business to the next level. Unfortunately, you probably need more capital to enact your growth plans for the new year. The good news is that a small business loan can provide you with the cash investment necessary to grow your client base and increase your sales. If this is your first time seeking an outside lender to invest in your company, the following tips can help you get the loan you need.

Tip #1: Fine Tune Your Business Plan

If the last time you looked at your business plan was when you were first starting out, then it is time to update it. Your plan should include your plans for the future, both short and long term. It should also contain a full set of your financial records, including profit and loss statements, company assets and debts, bank statements, and tax documentation. A detailed plan for growth, including a budget that shows how loan monies will be allocated and later paid off, is also an integral part of the plan.

Tip #2: Include Some What-If Scenarios

Lenders are mainly concerned with being paid back and making a return on their investment. This is why your job is to assure them that you are a good risk. One way to do this is to have a written risk assessment. Think of the things that could go wrong – losing a main supplier of goods, the bottom falling out of your main market, a shortage of qualified workers. Next, come up with a solution for each of your scenarios. Not only does this help set your lender at ease, it is also just a good idea to have a plan in place in case worse comes to worst.

Tip #3: Provide Some Collateral

In some cases, having some collateral is necessary to close the deal. It is best if this collateral is business property – you don't want to mix your personal finances in with your business finances whenever it is avoidable. Equipment, company vehicles, or even the building (if you own it) can serve as collateral. By offering collateral you are showing the lender that you fully expect to pay them back, since losing your business properties means you will no longer be able to operate. It also lowers the lender's risk, since they will be able to collect something if you do fail to pay back the loan.

Now that you're ready to go, contact someone like Bank & Trust Company to get started on your loan.