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Top Tips to Secure Business Funding in 2021

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It isn’t always easy to get the funding your business needs to survive and grow.

Even during times of economic growth, the banks are known to make business owners jump through plenty of hoops before they can get their hands on an affordable business loan, which can be frustrating when time-wasting can put opportunities in jeopardy.

Despite all the rigamarole of applying for business finance, there are some things you can do to make the process that bit easier and faster. From managing your documents to preparing a pitch, here are some of the best methods to obtain business capital.

1.    Stay on top of your documents

If you’ve ever applied for a business loan before, you’ll know that these applications can be pretty paper-intensive. From your tax returns to your invoices and service level agreements, corporate lenders have a habit of digging deep into the detail before deciding whether they’re happy to accept a borrower and the risk that comes with them.

For this reason, you absolutely have to keep your documents in order if you’re to have any hope of securing a business loan. From your accounting and tax records to cash flow projections, banks and business lenders want to know that they’ll get their money back and then some – so make sure that you can show them that your business is financially sound.

2.    Be a good creditor

It’s easy to say with hindsight, but maintaining good credit can go along way to convincing commercial lenders that you’re worthy of their time. By paying your bills on time and avoiding bankruptcies and foreclosures, you’ll be ahead of a significant number of business borrowers.

Another important thing to remember is that you should only really apply for one business loan at a time. Commercial lenders will usually need to see a credit report before they can extend a new line of borrowing to you, and when they do this it leaves a mark on your record. Too many in a short space of time could be a warning sign to cautious lenders, and you might struggle to secure an offer.

3.    Demonstrate good financial planning

One of the primary reasons that businesses struggle to access commercial lending comes down to the fact that they simply can’t communicate what they want to do with the money well enough. This is important to institutional lenders, because they don’t want to be extending credit without good reason. Generally speaking, if you can show that your loan will help you to generate more revenue over the long term, you’ll stand a better chance of convincing the lender that their investment is safe.

When you sit down with the bank manager (or, more often than not these days, get in touch with him via Zoom), make sure you have a rock-solid idea of what you plan to do with the money. Commercial lenders don’t like to roll the dice on businesses that would simply like extra capital, and the more detail you can provide, the more accurately they’ll be able to assess your application.

4.    Understand that all lenders are different

A healthy dose of reality can go a long way when you’re trying to secure finance for your business. The truth is that many large banks are more interested in lending to well established, high-value businesses since this means more profit for them. While start-ups and SMEs may be able to find a major bank willing to extend credit to them, it might be that they can find better deals elsewhere.

The upshot is that entrepreneurs should shop around before deciding to make an application, and failing to do so could see you getting saddled with a high debt total on terms that aren’t reflective of your commercial reality.

5.    Find funding the easy way

Fortunately, amidst all the complexities and challenges of securing a commercial loan, there is an easier way. By applying for a personal loan using an online credit broker like Little Loans, you won’t have to go through all of the usual bank manager meetings or weeks upon weeks of waiting for money to hit your account.

With a simple and quick loan eligibility checker and the chance to be matched with the direct lender who is most likely to approve your application, it couldn’t be simpler to access funding for your business. Forget printing off your tax accounts, setting out a business plan, or even having to show years of good credit. What matters the most is whether you can realistically afford to repay what you borrow in the here and now. It’s lending made easy, and it could be the ideal solution for your small business.

When it comes to the crunch and you need money for your business, it pays to have followed the tips in this article which could gear you up to get an offer from a commercial lender. For those times when it isn’t that simple, a short-term personal loan could be the very best option for funding your venture without the hassle.

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