When your business is in its early stages, you need a loan to grow it. Yes, there are ways to start your business with very little capital, but even in the Internet age you need loans to grow and expand your business. New business and small business owners are often afraid to take out loans because they believe that repaying the same loan with interest will hinder their growth. The fact is, a loan isn’t that big of a responsibility if you’ve done your homework before getting it. Obtaining a loan in a hurry without researching the market and knowing the growth potential of your business can be detrimental to your business.

Your business plan matters big time

It doesn’t matter how experienced your management team is when your business plan is weak. When you apply for a loan from lenders, they are trying to find reasons to send you the desired loan. They want to be sure that the loan they forward is repaid on time and according to the terms and conditions stated at the time of the loan. Lenders will rarely assess your business’s potential to repay the loan based on what you talk about. What they want to see is a solid business plan and that’s why you need to have an impressive one. A solid business plan will consist of the following and a few more.

• the description of the company
• Experience and managerial role
• Product Description
• marketing strategy
• Financial projections
• an executive summary
• Documented Cash Flow

Keep in mind that banks often look at cash flow on a documented basis, and their scrutiny isn’t limited to what your projections are for the future, but more importantly, how you’ve handled things in the past. They will review your company’s cash flow records for the past two years to see if the loan you are applying for should be granted. So, keep your business plan in mind and make sure you’ve worked through all aspects to present something impressive to investors.

Your loan options are many

Sometimes you have a solid business plan and everything else is in place, but your understanding of loan options isn’t the best. Many small business owners live with the impression that the only institution available to obtain a loan is a bank. That’s far from the truth because there are dozens of other ways to get the loan or investment for your new businesses that are much easier to manage than a bank loan. Some of the options available to you include government SBA loans, invoice financing, business equipment financing loans, etc. If you are just a startup and none of those options seem viable to you, there is online fundraising.

Online fundraising has become quite a popular method of getting investment for your start-up from people who are confident in your business idea and concept. By using the financing website, you have access to millions of thousands of investors located all over the world who are willing to help you if you can convince them with your business plan and the team behind your project. So avoid making the mistake many small business owners make when they think the bank is the only place to get money for their business.

Your time to apply for a loan is important

This is a huge mistake that small business owners often make and pay the price of not being able to get the loan they want on the terms they want. See, they will always tell you to have a solid business plan because that is the only way investors will trust you as an entrepreneur or entrepreneur. When you create your business plan, you’re not just jotting down random numbers on a piece of paper. Your plan should give you an idea of ​​what the needs of your business will be in the coming times. That’s when it makes sense to apply for loans well in advance and not at the last minute.

When you apply for a loan at the last minute, you are seen as a business in trouble. Most investors will see your business as a sinking ship and never want to get on it. Obtaining a loan in these circumstances can become almost impossible. This is why you should apply for a business loan in advance and not exactly at the time you need it. You should also keep in mind that the loan approval process also takes time. If you need the cash urgently, every day that passes during the approval process you will be causing more damage to your business.

The right people can make a difference

Delegating responsibilities to the right people is an art and a skill that not many business owners have. Small business owners are often overconfident in their own abilities and afraid to trust someone else to do things for them. This can be a serious mistake because you cannot be lord and jack of all trades at the same time. For example, you may be very good at crunching numbers and making accurate projections for the business, but not very good at selling and presenting ideas. If you have to present your business idea, its marketability and outreach to investors, choose the person who can best present it. Despite your great business plan, you will not be able to get a loan due to your nervousness and lack of confidence when it comes to acting like a smart salesperson.

You have to keep in mind that investors are not only investing in your business, they are also investing in you. It is very important that they like your personality to invest in your project. Appearing unprepared or nervous in front of them will give the impression that you are not fit to lead the project, that your decision making is flawed and that you cannot create strong teams.

A well-prepared presentation can win hearts

It doesn’t matter who is giving the presentation when the content is boring and doesn’t address the points investors are most curious about. First, clarify your numbers and include them in the presentation at the correct points. Be the investor in your mind and think about the questions you would ask if someone presented you with the same product/service. Have your accountant, advisor and business attorney with you when you prepare the presentation. You don’t want to give the wrong numbers during the presentation and fall for a bad deal at the end of it. The most important thing is to explain your business idea as clearly as possible. Many times the presentations are so varied that investors cannot understand them. If they don’t understand your business, they will never invest.

So keep in mind that getting a loan is not that much of a challenge. Most of the time, it’s just a few small mistakes in the areas mentioned above that become the cause of missed opportunities to get the right loans for your business. Create a solid business plan, choose the right people to represent your business, and use all the options available to you at the right time to grow your business at the rate you want.