By Jessica Collin, Nwes Business Advisor
These days, getting a loan may not be as easy as it used to be but funding is available to those who do their homework. If you’ve got a great business idea but are finding it hard to get funding, these top tips may help you secure that all important capital.
- Start the process by taking a good look at your credit history. Obtain your credit history report and check to make sure it is accurate. Make sure you explain to the lender any discrepancies. Be upfront about any adverse credit information, the lender will do thorough checks anyway so not divulging any bad credit history in the beginning could reflect negatively on your character.
- Prepare a business plan that shows you have a good understanding of your business and its market, and includes realistic forecasts. This will demonstrate you are ready for investment and that consumers want and need your product or service. Nwes has experienced business advisers on hand to help you make sure your plan contains the right information.
Your business plan should include:
-A summary of your business describing how your business will work, where it will operate from, what your financial projections, how much money you are investing and information on how much you want to borrow
-Market Research (who your customers are) Demonstrating that you have enough people or businesses willing to pay for your goods or services is vital to your business survival and gives you a greater chance of success for a business loan approval.
-Competitor review. How do your services and prices compare to your competitors? What is your Unique Selling Point?
-Marketing Plan (including a promotional timetable with costs attached)
-Contingency Plan (a backup plan in case things don’t go exactly the way you think they will – what if customers take longer to pay than anticipated, what if you’re ill and cannot work, what if your sales are lower/higher than expected etc)
-Detailed financial information, including your personal survival budget, start-up costs, sales forecast, cash flow forecast and a profit and loss.
- Don’t forget your CV. It could be your experience or qualifications or that of your key personnel that sways the decision of the lender. Lenders very much take into consideration the people behind the business.
- Where possible, back up your plan by sourcing letters of intent from potential customers. It’s tougher to get a loan if you haven’t got a trading history but if you can get customers lined up prior to your launch you will at least have something to back your financial forecasts up with. It is reassuring to the lender that you will be making sales right from the start.
- Make sure you get help if you need it. Sometimes the people who make the decision on whether or not to lend to you won’t get the opportunity to meet you face to face. Your business plan needs to stand alone and make the right impression, first time.
- Attending an Nwes business course could be the springboard you need to success. Our qualified business mentors will guide you through the business planning process and help start you on your path to self employment. Nwes is also an official partner in the Start Up Loan Programme, a government backed scheme developed to boost economic growth.
Turning your business idea in to reality can be the most positive step of you professional life. By following these steps your will be in a strong position to secure the funding you need to get off to a flying start!