Loan for starting a business
So you are one step closer to your own business – you have an idea. And all you need is 100 thousand to turn the matter into a million. But these 100 thousand are not. Moreover, as luck would have it, there wasn’t a rich uncle nearby who would lend the treasured amount and add it from above. And friends are still not millionaires. Is there really nothing left for you but to refuse to implement a business project?
In the Russian government, discussions on lending for starting a small business are becoming a tradition, but things are not moving beyond conversations. That is why, opening a small business, entrepreneurs take consumer loans, the problems with which are much less.
As for quick loans, which have recently become very popular, they are also available to businessmen. However, today there is still a special lending mechanism for young entrepreneurs, for those who lacked the treasured amount. In order for a credit institution to draw your attention to you and share your savings specifically on starting a business, you should consider several aspects.
First: business plan
Lending to start-up businessmen, banks consider it a rather dangerous enterprise. And in this they are absolutely right, because in essence there is no assurance that the beginning businessman will not go bankrupt – no one can accurately figure out how his business will go. Therefore, the first step towards guaranteed receipt of money for the opening of an enterprise will be a well-made business plan.
When lending institutions allocate funds, they expect to completely reduce the risk of default, and a well-designed business plan is your assurance that the project will be successful and that risks are minimized.
A business plan is a document describing the most important aspects of a future enterprise. It is necessary to draw up a business plan on paper, following certain standards, make all the necessary calculations – they will help you notice problems in the future in advance and make it clear to the bank that your business project is profitable.
That is, you as a borrower need to carefully analyze the market, make the necessary calculations. In addition, in order to persuade a credit institution to issue a loan, you need to correctly prioritize your business plan. Before submitting a business plan to the bank, the entrepreneur is advised to evaluate the reality and reliability of the future project from the outside.
Second: credit history
Getting a loan from a bank may not be easy. However, today a fairly large number of credit non-governmental organizations are meeting businessmen.
As you know, history does not forgive mistakes, which is why credit history plays a significant role in considering applications for opening a business.
If you previously had debts, as well as late payments, this may become the basis for refusing you a loan. If you yourself know that you have a bad credit history, it is worthwhile to draw up an explanatory letter in advance in which you indicate clearly justified reasons for the delay in your loans.
Third: own contribution
Often, banking institutions are more favorable to entrepreneurs receiving a loan to start their own business, if the latter invest their own funds.
It will be better if the amount of your contribution to the constituent capital is at least 25% of the amount needed for the implementation of the business project. This situation will increase the favor of the banking institution to you.
This is because the own invested funds, along with the funds of the credit institution, will be at risk. And people take their money much more carefully.
Fourth: Appearance and Behavior
When considering an application to establish their own business, credit institution employees often attach great importance to the appearance and behavior of a young entrepreneur.
Therefore, it would be better if the borrower looks solid, in a good suit, speaks using specialized phrases, thus indicating the seriousness of his own attitude to the enterprise, as well as the level of knowledge that he has in this field.
In addition, things such as education and the field of work of a novice businessman play an important role in assessing creditworthiness. More important than the appearance is how the borrower submits itself. Therefore, you must behave quite firmly and confidently, demonstrate your competence in all matters related to your business.
If for any reason the credit institution still refused to give out a loan, do not despair, but rather pay attention to why you were refused, try to correct yourself and apply again.
Everyone knows that one of the most valuable qualities of a good businessman will always be determination, which a credit institution will definitely appreciate in the current situation (unless you satisfy all the requirements associated with issuing a loan) and ultimately give you the treasured amount.