If you want to join the growing ranks of the small business-owners, and you don't have the available cash, you may need to obtain financing for your venture. Unfortunately, business finance loans aren't always easy to obtain, especially for the first-time borrower. However, don't let that stop you from proceeding with your plans. There are steps you can take to improve your chances of being approved for a business financing loan. Before you give up on your dreams, of owning a business, here are four tips that will help you obtain the financing you need for your venture.
Start With a Home-Based Business
If you want to open a brick-and-mortar business -- one with a free-standing commercial building -- start with a home-based venture first. One of the best ways to obtain a business finance loan is to show lenders that you already have a lucrative business and a sound business plan. Once you've run your home-based business for a few years, you'll have the history you'll need to obtain financing for expansion into the brick-and-mortar business world.
Manage Your Current Debt
If you want to increase your chances of being approved for a business finance loan, make sure you manage your current debt. This includes the debt you have for your home-based business. Lenders want to know that you have the income to handle the debt you have, especially since you'll be adding debt once you're approved for your business loan. A strong debt management plan will improve your chances of being approved for your loan.
Maintain a Positive Credit History
If you're looking to finance your new business venture, maintain a positive credit history, which includes making all your payments on time. Even if you have a good score, late pays can cast a negative light on your credit history, especially where business finance loans are concerned. If you have a habit of forgetting to mail your payments from time-to-time, set up automatic payments for all your debt. That way, you can avoid the late pays on your credit report.
Don't Settle for a Denial
Finally, if you need financing for your new business venture, don't settle for a denial. Being denied for a business loan may take some of the wind out of your sails, but don't let it stop you in your tracks. Instead, gather your documentation, look at the reason for denial, and reapply through a different lender.