Tips When Applying for a Small Business Loan

by Mrs Money

When you are applying for a small business loan, lenders look at your credit. Since the business is likely owned only by you, no other factors play a significant role in credit worthiness. Lenders take several items into consideration, with the three most relevant being discussed below.

View your Credit Report First

Before you even complete a loan application it is important to review your personal credit report. If it is not perfect or near perfect, work on correcting the entries by making payment arrangements on larger sums. Pay off small balances first. This will help to quickly improve your credit score.

When a potential lender sees that you are making payments on larger sums, it shows financial responsibility in the efforts to recover your good credit standing.

Have a Specific Business Plan in Place

When you approach a lender for a small business loan, they need to see that you have a proper business plan. The plan should discuss the type of business it is, why the area needs your specific business, the potential for profit and how you plan to grow and market the business. If you have any promotional materials in place, product samples or prototypes, it is ideal to take these with you.

The business plan should be well-detailed, accounting for every penny that you are asking for.

The funding breakdown should include:

• Funds for space rental/mortgage payments
• Utility payments
• Supplies
• Payroll
• Additional business expenses

This should also be detailed enough to be broken down by the period of time these funds would cover upon estimations of demand in the area for your business.

Provide a Detailed Expense Sheet

Other than in the business plan, a detailed expense sheet should be supplied. This is an exact breakdown that includes costs for building if needed, costs of renovating an existing space, furnishing the space, technology and security features that are required and who you expect to contract for these jobs. Their quotes should be attached to this expense report.

When a lender sees that you are fully prepared to run a small business in a specific demographic area, they scrutinize every detail that you provide. There will also be a portion of the discussion that allows them to ask you specific questions about the business, why you want to start it in a certain area and what you plan or wish to achieve by bringing the business to that area.

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Finding Financial Help When You Need It

by Mrs Money

Even the most skilled deal finders among us can run into financial trouble from time to time. So, instead of feeling bad and ashamed, try to feel proactive. What matters, after all, is not how you got here. You can’t do anything about that now, you’re here. What matters is what you’re going to do about it and how you’re going to put everything back together.

For many people, this means finding a professional to help them get back on track. There are a wide range of financial professionals who can help you take control of your money and in this article we’re going to teach you how to find the best person to help you get your financial situation under control, whether that person is a financial planner, a credit repair expert, or a lawyer.

#1. Your Situation Matters More Than Their Ego

Some professionals are more interested in padding their bottom lines than they are in actually helping the client who is sitting right in front of them. They create a series of action plans that are based upon a few stereotypical situations and then try to shoehorn every client who comes to them into one of those plans. It’s fine if that plan actually helps you improve your situation but, most of the time, it won’t. Why? Because every person and every situation is unique. It is important to find a professional who will sit down and help you put together an action plan based on you and your numbers and situation.

TIP: If the action plan is set up before you ever meet face to face, that’s a bad sign.

#2. Credentials Matter

Anybody can say that they are an expert in finance and financial law. Not everybody can say that they have the credentials to back up those claims. It is important to make sure that your credit counselor, financial planner or financial lawyer has all of the right certifications and legal qualifications to represent you as you get your financial situation back on track. This means verifying a lawyer’s bar number with your state bar association. It means, according to the Wall Street Journal, verifying your financial planner’s CFP (certified financial planner credential). Do the leg work (well, the typing work and calling work) before you write the check.

TIP: Diplomas and certificates are great but get the details and verify them yourself.

#3. Beware of Ambulance Chasers

Suze Orman says it best: “A successful adviser doesn’t have to look for clients.” If a company cold calls you to talk about your finances and how that company can help you, hang up. For one thing, Orman is right. For another: never give any details about your finances to a stranger, especially over the phone or over the internet!

TIP: If the caller makes you verify that you are you before they verify their identity and reason for calling, hang up. It isn’t rude, it’s self-preservation.

#4. Professionals Keep Up With the News

The laws and details surrounding the financial and credit industries can change at any time. For instance, according to the Lexington Law, FICO is changing its scoring structure. You want a financial advisor who knows what is happening on any given day. If someone quotes a detail that you know is outdated, that’s a bad sign.

TIP: If you know more about the financial landscape than your potential professional helper, choose someone more in the know.

Finally, make sure that you meet with more than one potential professional before you sign on the dotted line. It’s important to find someone with whom you gel on a personal level as well as on a professional/client level. The last thing you need is to hire someone you’d rather avoid! That won’t help your situation at all!

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