Any aspiring entrepreneur who wants to start a business will consider obtaining a financial loan. Starting a business will require large capital resources depending on the type of service or product you want to deliver to the market. The more you are prepared when requesting financial aid, the better chances you have in getting approval. It is important for you to learn what the lender requires from your end. Have a look at these 4 steps that provide guidelines to getting a loan.
Check your Credit Score
One way the lender judges your reliability is through your credit score. Your personal and business credit history will be examined before you are granted a loan. Before you apply for a loan, make sure you have a good credit score. Obtain credit reports and review them to see if any changes need to be made to get your score back in order. Usually, a good credit score is around 650 – 700 and maintaining this score, for the most part will guarantee an approval.
Determine your Requirements
Next what you should do is decide what you need the money for and how much you need. You could be needing a loan to start a new business from scratch, expand a Hong Kong company setup service, purchase equipment, purchase property or increase working capital. Whatever the requirement is, identify the precise reason. Often business owners are unable to identify how much they will need to start a new business or develop an existing business. Get financial help and make a practical estimate of the required budget.
Explore Lending Options
Learn what type of lender is suitable for your business requirement. Commercial banks are the most popular money lenders. If you need a small loan, do not approach big banks. It is likely that your request will be turned down because small loans are less profitable for large banks. Instead, go to a small regional bank where you might have a better chance for approval. In the meantime, get in touch with a company registration service. They usually maintain close relationships with banks which might be an advantage for your business.
Present a Good Business Plan
Once you have found a suitable lender, the final step is to prepare a good business plan. This is the last and the most important step. An attractive business plan is likely to get loan approval from the bank. Make sure to include future financial projections and assets that act as security to the loan.
Many financial institutes grant loans based on your business plan and credit score. So take measures to do well in both aspects.