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Securing a loan as a small business

Most businesses struggle to secure finance as it is, but when the recession struck, things got a lot harder. Small businesses in particular found it a lot more difficult to secure the cash they needed.

Fortunately, there is a lot that you can do to improve your chances of securing a loan for your small business. Here are our top tips:

Keep good accounts

Being able to prove that you can afford the repayments is critical to securing a loan. If you keep up-to-date and detailed accounts, you will have the information necessary to provide lenders with the proof they need to agree your loan application.

Consider alternative forms of finance

As well as approaching traditional financial institutions, consider other loan products. Peer to peer lending, invoice financing, or credit unions are all alternative ways of borrowing.

If you do choose one of these options, be careful to work through the terms and conditions, and make sure that you fully understand all of the costs. It is particularly important to understand what happens if you should miss a payment.

Fill out the application in full

When applying for a loan, it is vital to fill out the application form in full. Any missing information will only make it more likely that your loan will be rejected. If you are asked for a business plan, you need to supply one. Your accountant can help you with preparing a business plan.

Tap into the expertise of others

If you are applying for a business loan for the first time, it makes sense to tap into the experience of others who have successfully borrowed money. Ask other entrepreneurs how they secured their loans and ask societies like your local Chamber of Commerce for advice. Your accountant will also help and offer you support and advice.

Posted by Peter
November 10, 2014
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