Small business loans are often difficult to secure for new businesses with a lack of financial history. Often, the influx of capital generated by these loans is precisely what a small business needs in order to survive difficult early stages of development. Follow these tips in order to boost your chances of successfully getting the small business loan your company needs.
Lower the Loan Amount
In the current economic climate, smaller loans are more likely to get approved by financial institutions. Your chances of having your small business loan approved improve greatly if you can manage to keep the amount you are asking for under $100,000, which would qualify the financing as a micro-loan. The best way to lower the amount you need to borrow is to diminish your business’s day to day and big-picture costs.
Save money on marketing by employing social media as an advertising tool. The use of online marketing and networking resources can greatly lower how much your business spends on bringing new clients and keeping existing ones.
Enact a hiring freeze to control how much you are spending on wages and benefits. The amount of money you spend on training will also be kept controllable by not bringing in new employees.
Control your business’s technology costs by utilizing cloud-enable software which serves multiple functions and can be downloaded for a reasonable cost. Instead of purchasing multiple programs to handle different aspects of the business, like billing and scheduling, one or two cloud-based programs can handle all day-to-day processes
Keep a close eye on cash-flow management in order to increase how much money your business is taking in from customers and correctly manage spending habits. Follow up with customers who have outstanding bills, no matter how uncomfortable you may be with pursuing payments.
Pay Off Other Debts
Another strategy for increasing your chances of getting a business loan approved is to improve your company’s credit worthiness. The first step in improving credit is to pay off any outstanding debts you or your business currently owes. If you cannot afford to pay these debts off in full right away contact anyone you owe money to and make payment arrangements. A negative credit history can hurt your chances of the loan being approved.
An influx of capital from a small business loan can help you maintain the growth or survival of your small business. Decrease costs and improve your credit worthiness to boost your chances of the loan being approved.
Danny works for a company that provides asset based loans to small and medium sized businesses. If your business is struggling with cash flow, visit his website to see how they can help.