Start here:
- A full scale plan for borrowing
- An action (to do) list which will enable you to develop a plan.
Raising funds for Business is a lifetime skill. You have to get good at it.
- Reason for borrowing:
- Why do you need to borrow? Get your business in order before you borrow. Fix faults and issues- plan for the long term, take into account efficiency, profit margins, etc.
- Know how much you need to borrow
- Timing: It usually takes at least 3 months and upwards to obtain financing. If you want to burrow because you need cash urgently, you are already in a bad place. It is easiest to get finances when the business is stable
- Be ready for a process. Determine how much you need. Give accurate facts and figures, Prepare documents
Expert tips for getting a Business loan
DO NOT GIVE UP
It is hard to get business finance, but not impossible. You just have to use your talent as an entrepreneur and be creative.
CONSIDER LOANS FROM FAMILY AND FRIENDS
This is a major source of finance for businesses around the globe and South Africa is not an exception to the rule. You can use the funds for getting started and then borrow from a financial institution once your venture is stable. Generally, even if you decide to use a business loan right from the start, you may have to ask the people around you to become co-signers. There is one simple rule to keep when it comes to borrowing from family and friends; you have to do it professionally so that they can have peace of mind about their money.
MAKE A LOAN APPLICATION
Even if your chances of qualifying are low, you should give it a try.
MAKE APPLICATIONS TO SEVERAL LENDERS AT ONCE
This will give you higher chances of getting a business loan and save you time as well.
USE YOUR BUSINESS PLAN TO SUPPORT YOUR APPLICATION
It has to be comprehensive, concise and well organised. You have to be able to explain every detail to the lender.
PRODUCE A PRECISE FINANCE REQUIREMENT AND BACK IT UP
You have to explain how much you will borrow and what return the investment will generate. Generally, the smaller the requested amount is the higher your chances of getting finance will be.
BE PATIENT
You should provide for considerable delays in the processing of your loan application.
KEEP BUILDING YOUR BUSINESS WHILE WAITING
You should use all possible alternative options of finance and other support to establish your venture and stabilise its performance. You should work towards building equity as well. When your business is stronger and you have more valuable assets, you will have much higher chances of obtaining a business loan in the future.
START SMALL
You may have big plans for conquering the local and national market, but it is impossible to achieve this right away. That is why it pays off to down scale your plans so that they match the amount of finance which you can obtain.
ARRANGE FINANCE BEFORE BIDDING FOR A CONTRACT
This is essential for ensuring the execution of the work. If you have already won a contract, but you do not have finance, you should consider alternatives such as partnering with another company including a competitor. Your profit will be smaller, but you will earn good reputation, solidify your positions and improve your chances of getting finance in the future.
NEGOTIATE WITH SUPPLIERS
You should try to arrange a longer term for paying your suppliers so that you canmanage your money more easily and more effectively. They will most certainly show some flexibility, especially if you have paid them timely and in full in the past. You will go a long way, if you rely on personal contacts and high business ethics.
NEGOTIATE WITH CLIENTS
If you have secured a contract, you can arrange the client to pay a deposit and then to make progress payments as each part of the project is completed.
COLLABORATE WITH OTHER BUSINESSES
You can share assets with other business owners or use their facilities for a share of the profit which you will earn.
COPIED
No responses yet