Getting a business loan is something that anyone starting a emergency plumbers in London company or with a plumbing business in financial difficulty will need. However, many business owners do not know how to go about getting these loans. If you want to ensure that you get a loan there are certain steps that need to be completed.
Get Your Business Finances And Documents In Order
In order to qualify for a loan, a business will need to have been profitable within the last 3 years, in most cases. Lenders are going to be looking into your businesses finances before they agree to a loan. Lenders conduct this research into your finances to see if you are a viable risk to take or if your business will not be able to cover the loan. Your business credit history is where lenders will often look so you need to keep an eye on your credit score.
Your business and personal credit histories will be looked into as many lenders require you to personally guarantee the loan. However, if your business has enough collateral to cover the loan then the lender may not require this. If your business cannot cover the loan then the lender could put a lien on your personal assets.
Tell The Lender Your Story
Many lenders state that business owners rarely tell them why their business needs the loan. It is important that you tell the lender your business story and why you are looking for the loan. You should think about getting the loan as a business pitch and tell your lender why they should give you the loan. If the plumbing industry in your area has seen growth, tell the lender that you are looking to expand.
Go Local First
If your business has had some problems then a national lender might be less willing to listen to your pitch or give you a loan. However, your local community bank or lender may be more willing to help local businesses. Of course, there are some problems that come with using a local lender and the primary one is that you might not get the same amount for the loan.
Larger lenders have the ability to provide larger loans. You should also shop around for the best offers from both local and national lenders.
Look At Alternative Lending For Short-Term Needs
If you need a short-term loan then you should consider some of the alternative lending solutions available. Loans from traditional lenders usually come with longer terms and this may not be the right option for your business. Of course, when looking at these alternatives you need to carefully read through all the terms.
Alternative short-term lenders often make it easier for business to get loans but, they could be charging you a very high-interest rate. These lenders may also not offer asset-based lending which is something you can consider with the traditional lenders. These alternatives are also a good option for businesses that have been turned down by traditional lenders. Please feel free to contact us if you have any questions.