Are you interested in securing additional financing? If the answer is yes, then it is absolutely vital to make sure that you have all of your ducks in a row before you begin the application process.
Securing a business loan involves careful planning, to say the least. You need to be clear on things you need, things you want, what assets you have and how you are going to pay it all back regardless of whether or not your business, itself, survives. Thus, long story short, getting a business loan is more than filling out an application.
In fact, even before you start filling out applications, you should make sure that you’ve successfully avoided any serious missteps or common issues to ensure that you are denied down the line. For instance, many business owners, much like regular people have a few skeletons in their closets. If your business has a dark past for some reason like say you had trouble paying past debt, you better believe that, in many ways, securing your business loan just became a pipe dream.
Similarly, having a lack of cash flow is also another non-starter for most lenders. Unsurprisingly, your cash flow tells your potential lenders how much cash you have available to, wait for it, pay back a loan. Of course, if you have tons of cash on hand, you may be asking yourself, why apply for a loan in the first place? Well, as you very well know, loans help businesses of all sizes accomplish a variety of projects, ventures, and business upgrades. Nevertheless, you should always ask yourself if you and your business are actually able to afford additional financing.
Having bad credit and a lack of cash flow aren’t your only concerns, you also need to make sure that you have a clear plan for the future and that your head is not in the business clouds sort of speak. For instance, if you approach a lender will a careless or hopelessly romantic attitude about your business plans or your plan for additional financing you better believe you are going to turn off some reputable lenders. So, again be clear about your projected earnings, your plan for business and be organized—nothing is worse than not having the right documentation on hand or appearing unprepared i.e. being disorganized. Other common issues that can easily derail your additional financing plans for your business include being too picky or reserved when it comes to your lending options as well as letting a rejection impact your plans ( at least one of your loan applications will be denied that is the nature of business; remember you cannot be everyone’s cup of tea).
At the end of the day, you can easily address these above-mentioned issues with just a little elbow grease and once you do remember it is still important to have a strong pitch prepared for your potential lenders and to be passionate about your future plans when dealing with lenders. Lastly, if you are a small business or a newer company take your time making this decision as it is everyone’s interest to not bite off more than you can chew.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.