The startup phase of any business is often the most scary and difficult one any entrepreneur has to go to- after all, you’re finally taking your vision from a picture in your brain into the world of reality! That’s an intimidating feat! Freedom Debt Relief knows that one of the biggest hurdles that new businesses have to clear is the problem of funding- where will they secure a loan, from whom will it be, and how can they get approved in the first place? Though the competition for funding is currently at one of its highest levels in years, there are a few steps that you can take before filling out a business loan application that will improve your chances. Freedom Debt Relief has collected some of the best insider info on what lenders want to see from ideal applicants- and how you can increase your chance of success by fitting the mold.
Start with a good credit score. Freedom Debt Relief has found that one of the biggest reasons that lenders give for rejecting a business loan is that the applicant has a poor credit score. A bad credit score is an immediate red flag for lenders and investors alike because it essentially signals that you may have had trouble managing money in the past.
Before you even think about applying for a business loan, you need a good credit score. Take some time to ensure that you are paying your credit card bills on time, and request an increase on your credit line if available- because your credit score is calculated as a percentage of credit used vs. credit available, an increase is likely to plump up your score as well.
Have a detailed business plan. Investors and lenders don’t want to shell out the dough for just anyone- they want to see that you’ve put a significant amount of time and effort into strategizing how your business will make profits. To a lender, an application without a business plan says that you haven’t thought your idea the whole way through- and signals that they may not get their money back. Freedom Debt Relief recommends including a thorough and easy-to-understand blueprint of how your will get your business up and running, and including tangible milestones that you can show to investors to prove that you’re on track to reaching your financial goals…and paying back your loans!
Talk to local startup owners. Word of mouth is often the best form of advertising- if you’re interested in securing funding within your local community, try talking to local startup owners and asking them about where they found funding for their project when they were just getting off the ground. Your local experts will be able to point you in the right direction for low-interest loans, and may even be interested in making themselves an investor in your idea if it’s relatable or unique.
While securing funding for a new business venture can be difficult, Freedom Debt Relief has found that you can make the process much easier by putting your most professional foot forward. By shaping up your credit score and adding as much information as possible to your business plan, you can give lenders and investors the peace of mind that comes along with knowing that their money is in good hands- the key to being approved for any loan.