Financing your business is extremely important, and small errors can often impact the decision and outcomes you receive. It’s important you don’t make mistakes when applying for a business loan. Despite the relative ease of access the internet provides, it’s crucial you remain vigilant when applying for funding or you may not get the best terms or could even be denied altogether.
Prior to submitting your business loan application, make sure you adequately prepare to ensure that you don’t make common, avoidable mistakes:
You don’t know your credit rating
Before applying for a business loan, you need to know where you stand. Find out your credit score from the major credit reference agencies: Equifax, Experian, and Callcredit, and make sure everything is accurate. If you are a business owner applying for a business loan, even your personal credit score can have a bearing on the final outcome.
Not planning how much you need
When applying for a business loan, calculate exactly how much you need before submitting you application. If you’re accepted for a larger amount, make sure you have a plan for how the additional funds will be spent before accepting. The lender is there to be your helping hand and provide your business with capital, not encourage you to take money you don’t need.
Waiting until an emergency
Business loans are for more than emergency expenses. Of course they can be used to give your business an emergency cash injection to cover unplanned expenses, but they can also help you invest in your business and staff to increase success and growth. From purchasing equipment to underwriting a much-needed renovation, business loans have the potential to accelerate growth in your business if invested wisely.
Not exploring all the options
As a business, you don’t need to rely on your bank to acquire a business loan. You likely have more options than you realise, so make sure you explore opportunities for alternative business funding. More often than not, independent lenders can offer terms more directly suited to your business and come with a higher chance of approval.
Thinking you need assets for funding
Many banks and creditors require assets for security just to qualify for funding. However, this is not the case with all lenders. Unsecured finance solutions are increasingly common across the more agile and flexible providers and these don’t require any assets as part of the funding arrangement.
With such a variety of financial facilities at your fingertips, it is important to take the time to scrutinise which facility is best for your business. As always, the success of your business is in your hands. Set yourself up for success by exploring your options, planning effectively and avoiding common mistakes that we see every day.
At Boost Capital, our business loans can work with your unique business model and we don’t follow many of the stipulations a traditional bank loan would. We’re dedicated to providing you with the funding you need and helping your business succeed before you even apply. If you have any more queries about applying for business loans, take a look at our frequently asked questions or speak to a member of our friendly team on 0800 138 9080.