Are you ready to apply for a small business loan in 2019?

What are the next steps for your business? In view of the government shut down, businesses need to consider other options aside from the SBA. Surely, when applying for a small business loan you need to ask yourself several questions. First, area to address is the profitability of your business. Thereafter, does your credit score meet the requirements. Last, what will you use the funds for?

Without a doubt, at Lendinero over 500 hundred applications are submitted per year.  Also, small business loan specialist talk to thousands of business owners per year.  Undoubtedly, not all businesses who seek a loan are approved for one. Why?

Above all, businesses experience good times and bad times.
These experiences have demonstrated that numerous factors come into play in the approval process.  Primarily, there is a difference between a want and a need. What is a want? What is a need? When addressing seeking a small business loan, the first area to address is business needs.  Before you apply for a small business loan, determine if you will make a profit.  Some businesses can invest the funds from a loan and make a profit.

On the contrary, not all businesses can generate a profit with borrowed money.  However, acquiring certain assets may add value for your business.  In addition, they will allow you to grow your business.  What is adding value to a small business?
Purchasing a new equipment, software, technology, adding staff, branding, a new location and other tangible and non-tangible assets can increase the value of your business.  Business valuations are important to borrow more money in the future, raise capital or even if you want to sell the business.

Funding options that fit your needs.

Also, you need to understand your funding options and what best fits your needs. Business financing has changed a lot during the last 8 years. As small business owner you may not be an expert in financing, but you need to be an expert on cash flow management. Most business owners want the lowest rate and the lowest term. You need to know basic mathematics when choosing the right loan for you. Would you take a 30-year mortgage to purchase furniture for your home? Probably not. If you are considering in taking a loan you need to know what you will use the money for and what terms are reasonable for you.

Let’s assume you are going to buy a forklift that would allow you to change car oil. Once that forklift is in place it will generate money for you immediately. Why would you consider a 10-year loan when you will make money immediately?

Are you realistic? If you know you don’t have your financial statements in order why would you request a bank term loan? You are not ready for a bank term loan. Under this scenario you need to consider other options. Aside from what you need and what you want, you need to take into consideration what you can qualify for. You may only have $10,000 to buy a car but you want a Ferrari that costs $200,000. Can you afford it and can you qualify for the Ferrari? No. The same applies when you apply for a small business loan.