With entrepreneurship becoming more popular and successful, many are throwing their hats into the ring of starting their own business. After all, with persistence, the right business plan, and a desire to succeed, you can do it, right?
Yes. But this isn’t a Disney movie. Small businesses usually go under within the first two years, and some even sooner if owners don’t want to sell the house to keep the new startup in action. What most new businesses need is a loan, whether from the bank or from anyone else, to start a business and keep it alive until it can see a return.
However, securing a loan is easier said than done. Want to dodge the headaches and the rejection, and jump right to the approval? Here are four efficient, creative, and quick ways to secure a loan for your small business.
1. Be Organized
Banks deal with numbers, and naturally they like things to be organized. While the systems set in place by the bank are built with efficiency in mind, some are outdated and take longer to do so. Rather than letting your loan request get clogged up with the countless others, by putting in the extra effort to be more organized, you can see your request rise to the top – and be approved.
- Get your documentation in order.
You may not be the expert in paperwork, but the more time you can save the bank, the better off you’ll be. Sure, nothing is more embarrassing than having to run home for your business plan, but more than that, whatever information you can offer them up-front without their having to dig, the less annoyed and the less bogged-down they’ll be, able to process your request in record time.
2. Make it Personal
While you are dealing with factual money and numbers, you’re also dealing with a gamble – and there’s nothing guaranteed about that. With so many risks banks take every day, there needs to be something about you that stands out from the rest, giving them faith in your future success and also a reason to trust your ability to pay them back for their investment. Need a quick loan? It’s time to make it personal.
- Bet the farm on it.
Banks want to make money with you or watch you fail while they cash in; it’s as simple as that. Because of this, banks need a reason to believe that, if your business goes under, they’ll still have something to collect on. This is where collateral comes into play, and if your business itself isn’t valuable enough to pay back the loan, then you may want to consider a lien on your home as ante. This can open many doors for you, and when your business takes off, you’ll be able to do more than keep your home – you could even buy a second one.
- Sell it to them
A loan is much more than a bit of cash to keep you trucking; with banks in particular, a small business loan is a massive investment. Why should they invest in you when there are others to choose from? It’s time to put on your marketing hat. As you organized your documents, you’ll have gathered together your past successes, your long-term business plan, and other data sketching out the profitability of your business. Now it’s time to really sell it – why do you deserve a loan? Why should your business soar with one? Has there been a boost in the market recently? Is your niche taking off? Take the time to truly detail the unique value your business has to offer as a venture rather than a loan request.
3. Be Persistent
- Stay in contact.
While banks work in terms of numbers, they’re also run by people – people who may pay attention if you are persistent in keeping in contact. Rather than becoming another small business owner that asked for a loan but moved out of focus, it’s important to stay in contact and ask for regular updates on the status of the loan. Find a consultant within the bank of your choosing and be sure to call them regularly, asking for advice on how to tailor your business to be more suitable for a loan and for updates on your past attempts. If you stay in their field of vision, they’re more likely to help.
4. Get Creative
- Ask friends or family.
A loan doesn’t always have to come from a bank. If you need cash fast to stock up your inventory, pay the rent, or hire more employees, then there are alternative sources of funds you can look to. While it’s important not to mix business with pleasure, some of the most successful entrepreneurs on the planet can admit to asking for a small (or sometimes big) loan from their parents, their uncles, their cousins, and their best friends. This pick-me-up was enough to drive them towards success, and a quick conversation with a loved one can do the same for you.
- Build a history.
If taking a lien out on your home isn’t an option, then your choice may be to knuckle down and struggle through the long-run a little longer. While your business may explode into success with a loan, keeping on at your current state helps you to build a history. You’re showing the income you can guarantee, you’re showing your ability to adjust with the market, and you’re especially showing how well you can stick to a business plan. By having this history to present to lenders, you’re giving them greater reason to suspect their “bet” on you will be successful. While this may not seem like a fast solution, once you have created this history, you’ll be able to secure a loan in record time.
Loans of every kind are difficult to get, but there are quick and efficient ways to gain them. By keeping these things in mind, you’ll be on the fast track for the extra cash to make your business soar.