Interactive Directory

9 Things You Must Do To Maximize Your Chances Of Obtaining A Small Business Loan & 5 Home Biz Mistak

To get approval for your small business loan application, you must be able to meet the lending criteria set down. Some organizations are more risk averse than others, and will therefore have more stringent criteria.

To vastly increase your chances of a successful funding application, you will need to present the following information:

1. The reason for the loan. The lender will be looking for something that fits within the normal range and expertise of your business. The amount may cover a number of items, so you will need to cover each.

2. The amount required, and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).

3. Details of how you will repay the amount borrowed. For example, “From the increase in profits of reduced running costs of the Whizz-bang Go4It”

4. Details of security you will be able to offer to the lender. This will act as reassurance for the lender. If you’re not prepared to put up some aspect of security, then why should they?

5. You will need to include your business plan which will serve to answer essential questions relating to management capabilities, information about the market you operate in. What kind of business you are in etc.

6. 3 Years financial statements. You will need to present quality financial information from your accounting software, preferably signed off by your accountant or tax advisor.

7. Latest Set of Management accounts. Again produced from your accounting software.

8. Accounts receivables (debtors) and payables (creditors) ageing reports.

9. Principals financial statements. – Particularly required if some form of security is necessary.

If you are a new company, the emphasis is going to be on your business plan, and the security (also called collateral) you or your business can provide against the loan.

You must take the time to practice presenting your case to the bank or lender to iron out any glitches. Practice on your colleagues and family (you never know, they might be so impressed, they'll invest or lend!). It may help to role play the lender and come up with as many pointy questions as possible. The more time you take the better your chances will be. (But remember; don’t fall into the analysis paralysis trap!)

5 Home Biz Mistakes Every Entrepreneur Should Make!

In a previous article appropriate steps to start a

home based business were discussed.

This important article will review the 5 top mistakes many

home based business owners make that might evolve into a great

success story.

Warning! This approach is not for everyone. One theory is readers

will learn a new way of thinking and perhaps propel their

business ideas into motion.

Let's get started with the list!

1. Business Plans. Many articles’ online vow by the

business plan. Every new business owner must draft a

business plan if they want to succeed.

One successful business owner online never thought of

drafting a business plan. He learned the hard way.

He made many errors but claimed the learning experience

was a powerful teacher.

He further stated the lessons he learned were better

than any course in business school or college. He soon

learned how to deal with the many ups and downs in the

business world. Dealing with frustration. All things

you learn from the school of hard knocks.

2. Education. Once again many experts think several degrees

are the key to immediate success in any chosen field. Many

successful entrepreneurs never went to college. And quite

a few barely finished high school. Success is not always in

the books you read but in how you deal with your

business in the real world.

3. Rushing. Experts believe you should take your time

and wait to select the proper business for you and

your background or education. Taking time to study the

various ideas is key to success. Others see an opportunity

and immediately grab it.

4. Over confidence. Believing you will be successful and

ignoring negative opinions from friends and family. Family

might have good intentions, wanting to save you from making

an error in judgment, but they might throw a

wrench in your business idea. Halting the business venture

altogether.

5. Unrealistic view. Always seeing the good side. Thinking

positive. That yes you can succeed in this business. Positive

thinking is an asset every self employed business owner

should own. Many business owners with a positive outlook

continue striding forward where others simply give up.

That's the list. It bears repeating that going against expert

advice is not for every new entrepreneur. But many new home biz

owners found great success in following their own path.