What You Should Know Before You Request Financing

Asking for money is never an easy task, and when it comes to finding financing for your business, it can be even more difficult. There are several steps you can take to improve your chances of acquiring funding and making the process a smooth one.

Be Prepared

First, be prepared to explain to your potential lender why you need a loan or line of credit for your business.

Come prepared with complete, accurate and up-to-date financial records. You should have the basics with you: profit-and-loss statement, balance sheet, and projected cash flow. Reference letters from previous lenders, current suppliers and any strategic partners may not be required but can help to impress financiers.

Secondary documents you should have prepared for your lender include: a current business plan, a client list and appraisals of assets that may serve as loan collateral.

A Good Credit History is Critical

Be sure that your and your business partners’ credit history is clean and in good standing. Be prepared to explain any irregularities or problems.

Loans are serious business. Your lender thinks so and so should you. Review the terms, payment, interest and fine print of any loan agreement. If you can, consider having your attorney and accountant review the terms. Request the documents in advance so there is time to review them.

Don't Settle—Shop Around

Finally, don’t just settle for the first bank that says yes or the one bank you usually do business with. Shop around and consider the terms and interest. This will improve your chances of getting the best terms and finding a lender.

Every bank has its own criteria and requirements for lending to businesses. It’s important to pick a program that best suits your business and your needs.

Take the time now to prepare and establish your business credit line so your business can grow responsibly and dynamically.