How to Apply for a Small Business Working Capital Loan
Your working capital represents the difference between your current assets and your current liabilities, and it generally consists of cash you have to keep the business running, and pay any expenses involved. Many businesses find that they lack sufficient working capital either for day-to-day operations, or for growing the business, and in these cases, it becomes necessary to secure a working capital loan.
Establish a Good Business Plan
The first essential step toward securing the working capital loan you need for your small business is to have a solid business plan in place. This will be scrutinized closely by any lender, because it not only includes an overview of your business, but it also will include many the details of your current business status and your projected financial status over the next several years.
Decide on the Best Type of Funding
There are all kinds of options available to business owners for securing working capital loans, so it will be to your advantage to do some research and find the type of financial product which is best suited for your business. You’ll need to be sure that any repayment terms are compatible with your company budget, and if the loan involves any type of collateral, you need to be sure that you can risk putting that collateral up against the loan.
Maintain Good Credit History
Be sure of what’s in your credit history report, because it’s entirely possible that some inaccuracies may have crept in, and these may be disadvantageous to your business. It also behooves you to make payments promptly to your creditors, so that no negative lines appear on your credit history. When you’re aware of what your credit report contains, and exactly what your credit score is, you will then have a better idea about which lenders you might be able to approach.
Be Prepared When You Apply to a Given Lender
Make sure you have all your ducks in a row when you’re applying for a working capital loan for your small business. If you walk into a session unprepared with a potential lender, you can probably expect to be declined without any serious consideration even being given. This means you need to have all your financial statements prepared and available, your business plan should be accessible, and you should know exactly how much money you intend to borrow and what it will be used for.
Need a Small Business Loan?
Most small businesses would benefit by receiving extra working capital, and if yours is in this broad category, we may be able to help. Contact us at DrawBridge Capital, so we can discuss some options which may be available to you.