The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
The Kickass Entrepreneur
Subscribe
The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
  • All Blogs

Top Tips for a Successful First Time Business Loan Application

  • October 20, 2021
  • 3.1K views
  • 5 minute read
  • Rene
business loan application form
Share
Tweet
Share

For many businesses, having the ability to successfully obtain funding is a vital step in their development.

After all, a fresh injection of capital can help entrepreneurs secure new client deals, expand offices, and enter new markets, all of which facilitate the scaling of business operations.

While it would be ideal if a business could fund these things using their own finances, the reality is that most simply do not have the spare capital themselves to invest in growth.

However, securing a business loan is not as simple as it may sound. It’s estimated that banks reject around 80% of first-time credit applicants due to factors such as poor credit ratings, insufficient collateral, and a lackluster business plan.

With this in mind, we have created a list of five quickfire tips you can follow to help swing the odds back in your favor and hopefully secure that boost in the capital that your company needs.

Get Ready to Present a Solid Business Plan

Your business plan is by far the most important aspect of the entire application process. If your plan is vague or lacks important details, then the chances are your application will get thrown straight into the trash – or at the very least, it will delay the process by a few weeks.

The whole reason lenders want to see a business plan is that they want to know that you have a viable and sustainable business.

With this in mind, a solid business plan should incorporate several years’ worth of historical revenue and profits (if applicable), as well as sales and profit forecasts for the next three to five years.

In other words, you must demonstrate that you can afford the loan and that you have the financial resources to repay within the agreed time frame.

In addition to this, lenders also want to know what your business does. What products do you offer? What is the current state of the industry and the competitive landscape?

All of this information, and more, are used to gauge the level of risk the lenders will be taking on if they offer you a loan.

Consider All of the Options

As is the case with most things in life, it pays to shop around and wait for the best deal. Far too often, business owners feel a sense of urgency to open up a new line of credit, which leads them to take a sub-par deal that will cost them in the future.

Nowadays, there are many different financing options available to businesses, so make sure you consider them all so you can find the best deal (which is typically the one with the lowest interest).

While traditional banks are still the most popular provider of business loans, it’s worth checking out some of the alternative loan options such as P2P lending, crowdfunding, and maybe even government grants and schemes.

Don’t Be Fooled by Headline Figures

If this is your first time taking out a business loan, proceed with caution. The unfortunate reality of the business loan market is that lenders are very aware of the strong demand for credit facilities at this moment in time.

As a result, it can be hard to find a reasonable interest rate, and sometimes, lenders seduce business owners with an attractive rate, only to hike it after a few months have passed.

Remember, if something seems too good to be true, it probably is. In order to more accurately calculate your business loan, make sure you read all of the terms and conditions before signing on the dotted line and ask the loan provider for a detailed breakdown of all the fees that will be applied to your account.

This isn’t to say that you should avoid taking out a loan with an attractive introductory rate. Just be aware of the total cost of the financial arrangement and make sure you can afford the loan payments when the full rate comes into effect.

Be Honest With Potential Lenders

Always be honest when applying for a loan of any kind. Not only is it unethical to lie or omit information on your application form, but it is also a criminal offense.

With this in mind, do your best to ascertain that all of the figures and financial information within your business plan are correct. There is very little to be gained from hiding the truth, and it is futile to try to second guess the acceptance criteria for any given bank.

In addition to this, if you embellish your financial data and make it seem as though your company is performing better than it is, you will almost definitely be overstretching yourself, which may cause you to miss payments and default your loan in the future if you somehow manage to fool the banks.

Be Prepared to Leverage Your Existing Assets

Last but not least, you should be prepared to leverage your existing assets when seeking a business loan for the first time. Since your business will have little to no history of borrowing, you will be considered a high-risk customer.

In these instances, banks and other lending providers typically take extra precautions to minimize their risk, which usually involves asking borrowers to use their existing assets as collateral on their loans.

Sometimes, leveraging your assets is a smart move regardless of whether or not the bank requires it. This is because it allows you to free up funds that were otherwise locked in existing assets, thus allowing you to improve your cash flow and ramp up operations.

Furthermore, using existing assets as collateral may help reduce your interest rate, which means the total cost of your borrowing will decrease over the full term of the loan.

Of course, you need to be careful that you don’t overstretch and put your company at risk while leveraging your assets.

Conclusion

Try to strike a reasonable balance with your leverage, and seeing as it’s your first loan application, it’s typically advised to err on the side of caution while you build up a respectable credit score.

____________________________________________________

Some other articles you might find of interest:

Understand how you can maximize your time to grow your business:

Time Is Money And Your Most Valuable Resource. Use it Wisely to Build Your Business

https://www.thekickassentrepreneur.com/time-is-money

Looking for effective ways to drive and increase traffic to your startup website?

SEO Traffic Guide To Boost Your Blog Rankings

https://www.thekickassentrepreneur.com/guide-to-boost-your-blog-rankings/

Looking for effective ways to drive and increase traffic to your startup website?

3 Top Reasons Why Startups Fail and How Not to Become a Victim

https://www.thekickassentrepreneur.com/3-top-reasons-why-startups-fail-and-how-not-to-become-a-victim/

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

Related Posts:

  • User Experience (UX) In Low-Code Application Development - Tips and…
  • User Experience (UX) In Low-Code Application Development - Tips and…
  • 5 Ways Application Virtualization Can Transform the Way You Do Business
  • Six Reasons You Need a Custom Software Application for Your Small Business
  • From Missing Payroll to a Successful Exit and Now 17 Time Angel Investor.…
  • 5 Tips To Become A Successful YouTuber
Share
Tweet
Share
Rene

Previous Article
assorted dollar bills
  • All Blogs

What Is The Most Effective Investment Strategy For Crypto?

  • October 20, 2021
  • Rene
View Post
Next Article
a man discussing in front
  • All Blogs

Cutting Costs for Your Start-up

  • October 20, 2021
  • Rene
View Post
You May Also Like
man touching a woman's shoulder
View Post
  • All Blogs

Addressing Emotional Distress from Sexual Harassment in San Diego: A Legal Perspective

  • September 20, 2023
  • Meg Rivera
writing
View Post
  • All Blogs

8 Essential Steps for Impeccable Essay Proofreading and Editing

  • September 20, 2023
  • Meg Rivera
Net worth by age percentile calculator for Canada
View Post
  • All Blogs
  • Financial and Investment Calculators and Economic Data

Net Worth By Age Percentile Calculator for Canada with 2023 Data

  • September 9, 2023
  • Jeff Wiener
waste disposal
View Post
  • All Blogs

Dumpster Diving: A Guide to Efficient Waste Disposal

  • September 6, 2023
  • Meg Rivera
form 1040-x
View Post
  • All Blogs
  • Business

Mastering Form 1040-X: Your Guide to Amended Returns

  • September 3, 2023
  • Jeff Wiener
ohio tax rate
View Post
  • All Blogs
  • Business

Navigating Ohio’s Tax Rates: A Comprehensive Overview

  • September 3, 2023
  • Jeff Wiener
Safe workplace yellow out of service tag placing on RCD residual
View Post
  • All Blogs

Managing Workplace Accidents in San Diego

  • August 29, 2023
  • Meg Rivera
australia
View Post
  • All Blogs

Unleash Fun: Get 30 Free Spins in Australia’s Online gaming Scene

  • August 21, 2023
  • Meg Rivera

Join 6,472 Entrepreneurs That Get My Business Building and Wealth Creation Posts by Email

I can teach you how to build a successful, profitable business, and turn that into millions in personal wealth.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

We won’t send you spam. Unsubscribe at any time.

Recent Posts
  • Real estate broker agent presenting and consult to customer to d 1
    The Return on Investment (ROI) of Mortgage CRM Investments
    • September 20, 2023
  • man touching a woman's shoulder 2
    Addressing Emotional Distress from Sexual Harassment in San Diego: A Legal Perspective
    • September 20, 2023
  • Teach College Students About Money 3
    Crafting an Impressive College Application Essay: Your Path to Admissions Success
    • September 20, 2023
  • writing 4
    8 Essential Steps for Impeccable Essay Proofreading and Editing
    • September 20, 2023
  • ROI, Return on investment, Business and financial concept 5
    Elevating ROI: Advanced Tactics For Funnel Efficiency
    • September 19, 2023
Featured Posts
  • Become a Decamillionaire
    How to Become a Decamillionaire, Grow your Net Worth to $10 Million, and Join the 1% Club
  • how to become wealthy
    The Entrepreneur’s Secret to How to Become Wealthy and Build a Personal Fortune
  • Most Profitable Small Businesses
    27 of the Most Profitable Small Businesses to Open in 2023
Categories
  • All Blogs (1,077)
  • Business (408)
  • Canadian Financial Products (4)
  • Create Wealth (Investing) (134)
  • Entrepreneur Interviews (27)
  • Featured Post for Main Menu (4)
  • Featured Top Posts (23)
  • Finance (110)
  • Financial and Investment Calculators and Economic Data (118)
  • Fitness (9)
  • Growing Profits (72)
  • Growing Revenues (71)
  • Growing Revenues (115)
  • Marketing (160)
  • Millionaire and Business owner interviews (3)
  • Positive State of Mind (69)
  • Real Estate Investing (17)
  • Retirement (13)
  • Reviews (13)
  • Sales (16)
  • Sell Me This Pen (8)
  • Selling your Business (13)
  • Starting a Business (1)
  • Startup Ideas (18)
  • Technology (194)
  • Top Products (4)
  • Uncategorized (62)
Follow us
Author
Jeff Wiener
Jeff sold his company to private equity in 2017 and is now semi-retired. Jeff spends time…

    CHECK OUT MY BLOG, AND SUBSCRIBE

    about
    The Kickass Entrepreneur

    Expand Your Business, Improve Profits, Create Wealth

    Expand your business, improve your profits, and create wealth. Each one of the three can be elusive goals. Follow the right steps, and you, too, can create financial independence. It is possible … you just have to take the right steps.
    NAVIGATION
    • About
    • Blog
      • All Blogs
      • Create Wealth (Investing)
      • Entrepreneur Interviews
      • Featured Top Posts
      • Growing Profits
      • Growing Revenues
      • Marketing
      • Positive State of Mind
      • Real Estate Investing
      • Retirement
      • Sales
      • Selling your Business
    • Book
    • Courses
    • Podcast
    • Resources
    • Contact
    TAGS
    apartment BATNA Business business failure business growth business sale Capitalization Rate CAP Rate cash cash flow Creating Wealth Discipline entrepreneur entrepreneurship excel extra cash Featured goal setting Growing Business investing investment real estate M&A marketing Marketing KPIs Mergers and Acquisitions | M&A | Entrepreneur Blog Millionaire millionaire next door mistakes MUR Peter Principle Profit profitability real estate retirement revenue Revenues sales sales management Semi-Retirement Blog | Entrepreneur Blog | Small Business Blog small business Stagnant stocks success Thomas Stanley wealth
    RECENT ARTICLES
    • horse jockey
      Top 5 Most Successful Horse Racing Jockeys Ever
      • September 8, 2023
    • man and papers
      Active vs. Passive Investing: Which Is Right for You?
      • August 8, 2023
    • seoul
      How Seoul Internships Shape Your Professional Journey
      • July 24, 2023
    • casino
      Empower Yourself With These 5 Lifelong Skills For Success In Casino Business
      • June 23, 2023
    • Real Estate Brokerage
      Factors That Affect Real Estate Commission Rates
      • June 21, 2023
    • Digital online marketing commerce sale concept. Woman using tablet payments online shopping and icon customer network connection on hologram virtual screen, m-banking and omni channel.
      A Savvy Shopper’s Guide to Purchasing Power Tools Online
      • May 23, 2023
    The Kickass Entrepreneur
    • Coaching
    • Book
    • Blog
    • Contact
    • Privacy Policy
    • Terms
    • Disclaimer
    • Facebook
    • LinkedIn

    Input your search keywords and press Enter.