Whether a business model is brand new or a business has been well-established for years, there is often a need for additional funding and capital. Most people understand that starting up a new business requires a hefty amount of investment, but there are other situations where businesses can find themselves in dire need of assistance. As one example, it can be difficult to scale up an existing business without securing a large loan or similar form of funding.
Believe it or not, most existing businesses struggle to get approved for business funding from major banks and other comparable entities. While in some cases the verdict is simply unavoidable for the business, there are other instances where the business can transform that no into a yes.
As such, let’s examine what you can do as a business owner to increase the chances that your business will be approved for its latest round of funding.
Raise Those Credit Scores
One of the biggest factors in determining whether your business funding request will be approved comes down to credit scores. Whether it seems fair or not, both business and personal credit scores are highly considered by lending institutions. Even successful businesses that have recently seen their credit scores take a hit can be denied a loan because of this. If you are struggling to secure a loan due to your credit score, use a site like Lending Express to search for lenders without it affecting your score. For more information hit – apply now.
As such, taking the necessary steps to ensure that both individual and business credit scores are as high as possible should be the first course of action. This is not an easy nor quick action: the only way to improve these scores is to pay existing bills on time while balancing a reasonable ratio of credit to income.
Be Selective About Applying
Your business, its needs, and its funding options are unique: it’s important to remember that every situation is different. Yet all too often, many businesses pursue loan after loan from a variety of institutions, failing to consider how those lenders might not be suited for their exact needs. With so many unique business lenders available, there are many who provide very specific funding solutions based on the type of business, its size and its financial conditions.
Because of this, being selective about where you apply for business funding can make a huge difference. It’s important to first consider whether there are any lenders that cater specifically to your industry or niche; these entities may have first-hand knowledge of specific circumstances that might color perceptions of otherwise all-purpose lenders. Additionally, applying for too many loans in a short period of time can impact your chances just like it can with credit requests for individuals, so be selective.
Wait as Long as Possible
The unfortunate reality is that age impacts your chances of securing a business loan. While startup businesses cannot wait to secure that first round of funding, businesses that are already operating have a chance to improve their likelihood of funding by simply waiting until a later date.
The older the business, the more likely the loan or funding will be approved. As a business ages – so long as it remains in viable financial shape – it is perceived as a better bet by lenders. Therefore, waiting as long as possible to apply for any funding or loans is advised.
With these three tips in mind, you can begin making a contingency plan that will maximize the chances of funding approval. By being selective about when and where you apply, waiting until the funding is necessary and raising credit scores as much as possible, you’ll improve the chances of getting funded for your next big project or expansion.