For most small business people, there is only a certain level of success they can expect when relying on their own resources. Most small businesses, even very profitable ones, are often constrained by their lack of capital. What profits there are going to maintaining the business and making payroll, but imagine what you could do with a large infusion of funding for your small business. You could hire new employees, renovate your workspace or sales floor, or expand your marketing dramatically. If this sounds like a necessary next step to you, you need a small business loan.
But how can you help guarantee such a loan will be approved?
Invest In Quality Equipment
When you seek a small business loan, what you’re really trying to do is convince a bank, or non-traditional lender, to invest in you. One of the best ways to convince a lender to invest in you is by showing them you care enough to invest in yourself.
By planning on stocking your business with the best reviewed, most reliable, top rate equipment—regardless of what that equipment might be—you show your potential lender that you take your business seriously. For instance, if trying to expand a long haul trucking company, including your intention to buy used big rigs for sale with reliable brand names like Peterbilt and Hino will signal to lenders your business prowess.
By showing your lender that your necessary equipment is expected to be high quality and in good working order you assure them that you intend on being in business for a long time to come. Dependable equipment not only reveals your dedication to your craft, but it suggests you anticipate the sort of future success that might justify a hefty injection of investment capital.
Most organizations that issue small business loans will want a detailed description of your business plan—if that business plan includes well known, dependable equipment, your loan application is much more likely to be approved.
Invest in Thorough Bookkeeping
Any lender interested in potentially giving you money will want to see your books. They’ll want to know how you’re handling the cash you already have. This doesn’t mean you have to justify every expense you’ve ever made in the furtherance of your business, but it does mean your books should be clean, well organized, and preferably attended by a professional bookkeeper like a CPA. Well organized records, like high-quality equipment, suggests that you take your trade seriously—and things like well-organized tax documents show that you pay attention to the needs of your creditors.
Lenders like to see small businesses that can keep their books straight like a Fortune 500 corporation. The cleaner your record keeping, the more likely you are to get your loan application approved.
Provide A Detailed Business Plan
Once you’ve gotten your books squared away and your equipment taken care of, you need to show your lender how you intend on putting these—and future—resources to use. You need to be able to identify how this money can help you grow (and eventually pay back your lenders investment with interest) and you need to be able to support these assertions with facts pulled from your previous transactions.
If you can show how implementing strategies in the past lead to current success, lenders will be more likely to stake your future moves. Further, at a minimum, a detailed business plan should explain your business structure, your legal designation, an overview of your product or service and the market it will be competing in, and an in-depth analysis of your financial health.
If you can produce all of these things; a plan anchored in reliable equipment, good accounting, and formed around a holistic business plan; then business financing approval should not be difficult to obtain.