Ways & How

how to get credit for your business

how to get credit for your business

Whether you’re about to begin your business or are in the middle of expanding it because of the increasing demand for your products and services, you still need to discover how to get credit for your business. The primary challenge in any business venture or industry is that you never stop learning the tricks of the business world so you can maintain or improve your edge over your competitors. Some businesspeople have enough funds to increase their production, improve their support systems, import or export greater volumes of raw materials, and attend to many other business necessities. Whether you like it or not, you need to do those same things, and thus you need sufficient business credit. Here are some ideas that can help you secure good credit.

  1. Prepare a realistic business plan including related feasibility study. In case it’s your first time, don’t be afraid because there’s a first for everyone. What you can do is research the Internet for comprehensive guides about writing business plans. Or better yet, ask an experienced friend on how to go about it.



    your plan, the most important factors you need to specify are your business description and business purposes for which the loan is to be used.

    In most cases, financial institutions such as banks are very particular in the submission of feasibility studies because they serve as the banks’ basis in determining the viability or non-viability of your business. Remember that banking is also a business, so the bank management likes to be assured that the money they lend to you will generate profit. Once you’re earning, you can pay the bank, thus the bank is likewise earning.

  2. Estimate the loan amount needed. This is very important because the loan institution will assess your capacity to pay based on the collateral and documents you submit. More often than not, at least half of the market value of the properties you posted as collateral is the amount that can be granted to you. Unless you have more to show to the bank, don’t expect much more.

  3. Apply to a bank with which you have an existing account. If your account in the said bank has been in good standing for years, chances are your application will be approved. Attempting to apply at another bank isn’t really a good move because the possibility of getting your desired approval is very minimal.

  4. All business documents must be ready early on. This will facilitate your credit application faster. You aren’t the only client that the bank is attending to, so the bank will likely not focus on your credit application if some pertinent papers are still not in place. Therefore, take time to organize your business license, permit to operate, marketing plan, tax returns, property titles, certificates of ownership and statement of income. When you have everything ready, the bank will likely have a good impression of you and your credibility as business entity.

  5. Engage the services of a lawyer. Look for a lawyer specializing on the laws on obligations and contracts because the grant of your credit application entails the signing of a contract. This is to safeguard your rights and obligations with respect to the lending bank. Before signing the contract, technically called a mortgage contract, ask your lawyer to explain to you every provision therein, particularly the aspect of loan interest.

The default provision must also be closely noted because in many cases once you default in paying the amount due in a given time, this leads to the sudden escalation of interest. Make sure that you understand the interest rate and that it’s acceptable to you. The approval or rejection of your credit application entirely depends on your capacity to pay, your mortgaged properties, and the profitability of your business. But now that you know how to get credit for your business, you’re likely to succeed in your actions.

POST YOUR COMMENTS

Your email address will not be published. Required fields are marked *



WaysAndHow is an online community of brilliant "how to" article authors who are wholly dedicated in bringing you the best and most in-depth ...

Follow us tweets

  • Knowing how to apply for Medicaid online is probably the best and most convenient ...

  • Student loan is one of the most difficult debts to pay off, largely because you accrue most ...

  • Most people would say that one of the hardest parts in starting a business is getting new ...

whats new

Contact Us

Contact

Address: Triple E Holdings Ltd. P.O. Box 23475 Richfield, MN 55423-0475 USA