4 tips to get the money you need to be successful
One of the challenges in launching a business—or in growing the one you already have—is securing a business loan.
Fortunately, banks are anxious for new business, says Jose Infante, Senior Business Development Officer at Independent Bank. “People should understand that competition is strong and interest rates are low, and this is a great time to borrow.”
Here’s how you can improve your chances of getting the cash you need:
Know your market. Research both the market and your competition. Know what product or service is in demand and how to be competitive. The U.S. Small Business Administration has information on how to conduct research in order to help you establish your business.
Make a plan. You’ll need to use the research you’ve acquired to build a business plan. Your local chamber of commerce can be an important source of information for how to write your plan. Many chambers offer resources to would-be business owners.
Be a good borrower. You’ll also need to submit to your bank three years of your past tax returns, profit and expense projections for the business you plan to open, and a personal financial statement detailing your assets and liabilities. If you’re buying a pre-existing business, you’ll need tax, profit, and loss information for that as well. “And you’ll need to be able to explain to your banker how you’re going to make this idea successful,” says Infante.
Have skin in the game. Know that you won’t be able to borrow 100% of the expenses. “The bank will want you to contribute 20-25% of the money you need for [starting] the business,” says Infante.
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