So you have been considering to implement your dream project and is all set to go and apply for business loan to arrange for finances required, but before you move ahead and do so here is a quick book and a few tips you can keep in mind before applying for loan as it can help you take right decision and save you from aftermath of not so well researched decision.
1. Having a Good Business Plan- Before you go and apply for business plan, make sure you get your paperwork right. By paperwork we mean your primary document while applying for business loan that is your Business Plan, it should be clear and crisp with no vague things. It should clearly define your Business goals, strategies to achieve it and most important a backup plan, keeping in minds the uncertainties and unexpected nature of entrepreneurship in mind.
2. Demonstrate Your Business Generate Cash Flow- Your proposal and documents should be signaling towards clear and steady cash flows which assure you’re lending Institution that your proposal is commercially viable and good enough to generate enough funds for paying short term and long term liabilities in time and for meeting up unforeseen emergencies. A tick in this check box can be one of the major deciding factor as to approval your loan proposal.
Also read: Urgency Of Business Finance In Businesses
3. Be Cautious of Borrowing from Friends and Families- There is a very crucial need to understand the limitation of borrowing from friends and relatives in the initial stage of your business. The amount can be very limited since it has been raised from informal sources on the basis of trust and goodwill and therefore can be insufficient to fund the project and can make you compromise in quality in very starting which is not in favor of long term growth of business.
4. Consider Online Loans- With the boost in technology and arrival of digital age, FINTECHs have come into picture which are unconventional in nature. Sometimes when you can fail to conform with the eligibility norms in the initial stages of your project you can consider online loans as one of the options, since they are bit flexible in few eligibility requirements, interest rates are lower and does not mind with giving a chance to budding entrepreneur.
5. Compare and Determine Best Lender in market- It can prove to be worthy of time and hard work you spend during deciding on which lender to go for when you are eligible for loans from multiple vendors. Since then you have the chance to make negotiation with lenders and opt for the one gives you the best deal and can save your interest cost.