There’s plenty of factors to think about before setting up a new business, but how it will be financed is undoubtedly the most important consideration.
A business loan from a bank is one of the most obvious options – but how do you convince the bank to invest in your idea?
Read on to discover our four top tips for securing finance for your business.
Back yourself with capital
Expecting a bank to fully-fund your business would result in your idea never getting off the ground.
Banks will look at the amount of your own money you’re planning to invest and use this as an indicator of how committed you are to making a success of the business.
No-one will expect you to risk everything you’ve got, but building up a healthy starting budget will certainly work in your favour.
Save hard, take advantage of special deals like the VonBets Bonus Code and you’ll be on your way to taking your first steps on the business ladder.
Know your industry
Starting a new business can be risky, but having a proven track record in your chosen industry will be looked on favourably by lenders.
Understanding industry trends and knowing the potential pitfalls will show the bank that you’ve properly researched your idea.
Banks will consider how you plan to use the loan, the current state of your specific industry and its overall economic position.
You will need to provide information about your business structure, future plans, key customers and suppliers.
Be prepared to discuss your strategy for meeting challenges and dealing with threats.
Cash flow
We’ve all heard the phrase ‘cash flow is tight at the moment’ so it’s important to show the banks that you can still pay back their loan when sales drop.
The bank will want evidence that you can afford pay back what you borrow after you’ve covered other day-to-day running costs.
Many businesses experience peaks and troughs in their cash flow, but you need to show you can comfortably navigate the quieter periods.
Be trustworthy
If your personal financial record is littered with late payments, unpaid debts or county court judgements it’s highly unlikely that traditional lenders will risk lending money to your business.
Lenders will look at your track record and your general attitude towards doing business, so if you’ve shown a desire to keep your personal finances in order they’re more likely to take you seriously.
Impeccable references from people you’ve worked with will help your cause, showing your bank that you’re worthy of receiving their support.
