Maricor Bunal
For startup companies, getting a business loan and making the most out of the proceeds means a lot, if not everything. With little cash or none at all to start with, SME owners rely on corporate financing firms for their source of capital.
Now if you’re starting to worry whether or not banks or private firms will give you sufficient funding, think again. As it turned out, this fear is common for many startup SME owners. Based on inquiries and comments we receive here at Loansolutions PH, there are two most common fears SME owners have – we’ve also listed the solutions to get over these hurdles:
WHAT IF THE GRAND BUSINESS IDEA THAT I HAVE ISN’T THAT ATTRACTIVE FOR BANKS?
Thinking about your company and its potential may have caused you sleepless nights planning and doing research. But what if providers think it’s just another idealistic business that’s bound to flop? The thing is that this fear just boils down to whether or not you’ve done the right planning and research.
THE SOLUTIONS:
Learn how to write a winning business plan
Aside from presenting an idea, make sure to provide substantial evidence as to why your business will be a profitable one and will last on the market for many years. The best way to do this is to conduct a feasibility study.
Get your financial documents right
Once your business plan is ready, take into account your financial documents. Gather up your credit history records and pay off, if not come up with a win-win agreement with your current lending partners. Banks usually look into your relationships with other providers and see if you’re a responsible borrower.
Prepare the legal documents
As lenders need assurance for their money, it’s important for you to create win-win legal agreements with them. And this may mean presenting any of your assets as collateral.
WHAT IF I WON’T BE ABLE TO PAY OFF THE BUSINESS LOAN?
Let’s assume that your loan is approved. The next thing to worry about is what if the working capital you’ve borrowed ended up insufficient to sustain your business. In worst cases, you’ll end up losing your collateral along with your company?
THE SOLUTIONS:
Create a financial projection that’s realistic
This is also an aspect of your business plan, which means you only have to create a performance tracker and growth strategy to monitor your progress. Specifically, this should include a supply and demand statement, balance sheet, income statement, and cash flow statement. Your projection should be your basis on determining the exact amount to loan and the tenor to go for.
Shop around for the best business loan package
There are banks today offering project or business specific funding. For instance, Landbank offers ISDA and KAWAYAN loan options, RCBC offers SME Loans for women and AAIIB offers funding for Muslim entrepreneurs . BDO, Chinabank, Citibank and other major banks also offer revolving credit lines, giving you access to quick cash you can use for your startup.
Consult the experts
Two heads are better than one, right? So make sure to get all the expert help you need. Contact one of our loan consultants here at Loansolutions PH to guide you in choosing the right corporate loan type to suit your needs. We can also facilitate your application through our 3-Step Online Application Process, which will allow us to pitch your business plan to our partner lenders from all over the country.
So, there you go. Once you get over these two worst fears, you need not worry getting the approval of banks for your loan.
