4 steps toward improving your odds of getting a loan
The financing stage of a laundry startup may feel like the most overwhelming step at times. However, nerves don’t have to be a part of this process – in fact, some smart planning will make your search of quality laundry business or equipment financing a whole lot easier.
Here are four effective tips to improve your odds of getting a business loan:
1. Focus on yourself
The first step is to take a look at yourself as a business owner. Lenders will look at your personal character, your entrepreneurial experience and your financing history. While your new business is important, what you’ve done in the past matters. Of course, this also includes your credit history – both professional and personal. Make sure there are no errors in your credit report, and if you have a bad score, spend some time getting that number a bit higher.
2. Gather all the facts
The more information, the better – at least from a lender’s perspective. In your search of financing, lenders will want to know every detail about your business. Your odds of landing financing will increase if you give it to them.
Frequently requested details include:
- Profit and Loss Statements
- Utility Bills – Gas, Water, Electric (three months)
- Personal and Business Bank Statements
- Personal and Business Tax Returns
- Copy of premises lease or deed
Unfortunately, many business owners get in their own way at this time by holding back business information that is requested by their lenders.
3. Mitigate risk
Risk management is the name of the game in lending, but many business owners forget that when applying for financing. For example, too many are interested in “thinking outside the box” and “getting creative” in their pursuit of a loan. This can backfire.
The better option is to be perfectly ordinary, but focus on executing the loan proposal extremely well. This means demonstrating profitability, minimizing a dependence on debt and showing a strong supply as well as demand. Lenders want to see just how secure and safe your laundry business is.
4. A quality business
Perhaps the most important tip is to make sure your business is in tip-top shape. What this means is quality. Begin with a business in a good location. Also focus on creating a strong customer base, excellent growth potential and other key factors behind successful companies.
These traits are what lenders are looking for. The loan is an investment, after all, and they want to make sure they are investing in a stable, prosperous business.