In short – not really. Yes you have dot the i’s cross the t’s and make sure you have your shit together. But, as long as you have a well thought out and planned business your chances are pretty good.
According to this report by the National Small Business Association, almost 75% of small businesses were able to access the funding they needed to grow.
Starting a small business takes capital, let’s be honest. All these stories about starting from a garage at home might make for good clickbait, but the reality is, the people who built the giants of online shopping or mobile phone technology will agree, that they had a funding source in one or another. You could strike lucky and find you are able to self-fund and grow your own business on a shoestring budget, but you want to aim high and start off on the right foot from day one.
Applying for a small business loan requires you to get straight to the point, having prepared yourself beforehand. Sure you know your industry inside and out but can you prove to someone else you are worth taking a risk on? This is where you need to talk the talk as well as walk the walk.
What Factors make it difficult to get a small business loan?
Your Credit History
In an ideal world, you will have a more than stellar credit rating and will be able to boast a trust that will make even the most strict lenders bend over backwards to help you. Is this you? Finding lines of credit when it comes to small business loans can be complicated if you carry a bad line of credit, thanks to defaults.
Do some digging and get that credit rating higher if you have some indiscretions floating about. Prove you are able to manage your own personal credit before borrowing on the back of a new business. Overextending yourself with some complicated financial gymnastics could lead to you crashing out in the first round and acquiring some pretty hefty monetary injuries that could follow you around for the rest of your life!
You may not know where tomorrow is taking you, but knowing where your new business is heading and how it is getting there is just as important when it comes to applying for a small business loan. The devil is in the detail with this one, and you want to show not only where you want to go but the road you will take to realize your dream.
“Show me the money” In the immortal words of Tom Cruise, your prospective lenders will want you quite literally to show them where the money is. There isn’t any lender who will part with hard-earned cash to back a loss. You need to prove that there is a market for your business and how you intend to make money and keep developing your business to meet market demands.
Once your research is signed and sealed, you will need to deliver. Find the right lender for you by working with SCORE volunteer counsellors, Small Business Centre or the Small Business Association to make sure you are applying for the right loan for you.
Once your application is ready, you then need to find and meet with the lender to secure your funding and start your journey to becoming a brand spanking new business owner.