If you are a self-employed professional, your scope of work increases from just using your skills to managing clients, finances and a variety of other documents. For many self-employed professionals, the biggest challenge is securing finances to get the business going.
Before you go into a panic, here are some simple ways in which can secure business loans-
Do Your Research
Research on the various types of business loans available. They include term loans, overdrafts, start-up loans and working capital loans. Find out the business loan interest rate, fees, terms etc. of various lenders. Do not forget to research the reputation of the lender. Choose a lender and a type of business loan that best suits your needs.
Show steady cash flow
You can maximise on your chances of securing a business loan if you are able to show your professional capabilities can attract businesses and generate cash. It is desirable for you to have a steady income throughout. Keep your bank statements, financial statements, and tax return ready to show the lender while applying for the loan.
A Foolproof Business Plan
As a self-employed professional, you must know exactly what work you intend to do and how you plan to finance the business. You should also know the challenges and have a plan to mitigate them. All this information has to be written down in a professional and presentable manner. The more realistic, detailed and loophole-free your plan is the better are your prospects of securing a business loan.
Have the Documents in Place
Getting a business loan is all about reputation. Investors want to invest in people who know their business. If you present all required documents in an organized manner, the entire process becomes much quicker and convenient.
Find out the list of documents required, which includes application forms, tax returns, Form 16A, balance sheets etc.
Getting Around Existing Debts
If you have existing debts, the lender's interest to fund you may drop. The best way to avoid this is to guarantee the lender that the borrowed money would be used to make positive changes like expanding your profits or scope of business. If your assets are enough to meet the business loan interest rate besides the principal, your chances of securing the loan increases.
A sound loan helps you to meet gaps in cash flow and increase your productivity. Since there are several options available, with different terms and rates, only go in for the loan after fully understanding the potential consequences.
Before you go into a panic, here are some simple ways in which can secure business loans-
Do Your Research
Research on the various types of business loans available. They include term loans, overdrafts, start-up loans and working capital loans. Find out the business loan interest rate, fees, terms etc. of various lenders. Do not forget to research the reputation of the lender. Choose a lender and a type of business loan that best suits your needs.
Show steady cash flow
You can maximise on your chances of securing a business loan if you are able to show your professional capabilities can attract businesses and generate cash. It is desirable for you to have a steady income throughout. Keep your bank statements, financial statements, and tax return ready to show the lender while applying for the loan.
A Foolproof Business Plan
As a self-employed professional, you must know exactly what work you intend to do and how you plan to finance the business. You should also know the challenges and have a plan to mitigate them. All this information has to be written down in a professional and presentable manner. The more realistic, detailed and loophole-free your plan is the better are your prospects of securing a business loan.
Have the Documents in Place
Getting a business loan is all about reputation. Investors want to invest in people who know their business. If you present all required documents in an organized manner, the entire process becomes much quicker and convenient.
Find out the list of documents required, which includes application forms, tax returns, Form 16A, balance sheets etc.
Getting Around Existing Debts
If you have existing debts, the lender's interest to fund you may drop. The best way to avoid this is to guarantee the lender that the borrowed money would be used to make positive changes like expanding your profits or scope of business. If your assets are enough to meet the business loan interest rate besides the principal, your chances of securing the loan increases.
A sound loan helps you to meet gaps in cash flow and increase your productivity. Since there are several options available, with different terms and rates, only go in for the loan after fully understanding the potential consequences.
No comments:
Post a Comment