Every business goes through slumps. Sometimes, you can anticipate these based on past sales cycles. However, that is not always possible. Some financial requirements come with little or no warning.
You need to obtain funding for your small business to cover these shortfalls. But, there are things that you can do that hurt your chance of receiving funding. These are the top things that can keep you from getting a small business loan.
No matter what project you are trying to complete there are things that will tie your hands before you get started. Trying to obtain a small business loan is no different. If you have past credit problems or other personal issues, neglected to plan for your small businesses’ future, are simply disorganized, or cannot prove your past finances then you are behind the eight ball before you even start. If you utilize the tips above then you will avoid the top things that can keep you from getting a small business loan.
1. Past personal problems can rear their head
The majority of people have something in their past that they are not proud of. When you are trying to obtain a small business loan, these may come back to haunt you. Past poor credit is a great example of something that stops many small business owners. If you are facing past credit problems then looking into non-traditional funding such as Fundivo may be a great option.
2. You have poor financial habits
If you have poor financial habits then lenders may be leery. Lenders like to see that you are able to effectively handle your finances. After all, if you can’t handle your current finances then how do they know you are going to pay their loan back? You need to have a good understanding of your small business’ current cash flow and be able to provide spreadsheets to prove it. You should calculate cash flow at least quarterly.
3. You lack organizational skills
No one likes someone who is not organized. You don’t want friends walking into a cluttered and messy house because it will reflect negatively on you. Clutter in your business especially finances will reflect just as negatively on your small business. Know beforehand what paperwork your potential lender needs. You can easily find this by looking on their website or talking to a loan officer. When you meet in person then make sure you have all the paperwork in order.