Getting a business bank loan
The first question you need to ask yourself is - do you actually need a cash injection into your business. You could be a start up business or you could be a business that needs a new machine or more stock for example. Either way a business bank loan can be a relatively cheap way, and more importantly a good investment for your business in the long run.
In order to get a bank loan for your business you will usually require a good personal credit rating - especially if you are starting a new business. A lot has been said about banks not lending to businesses - and they have shouldered a lot of the blame for not helping the economy become more fluid, but to be honest that isn't wholly true - banks love lending to people and businesses that they are confident of paying them back over time. That is after all how banks make a lot of their profits. You cannot blame the banks for not lending to people who are unlikely to pay back - we all have those "friends" who come out of the wordwork wanting to borrow money - we hear the lies they spin - how they'll pay you back at the end of the month and they never do...in short they are "robbing Peter to pay Paul".
If you are a start up business - make sure you have a business plan. If you are after a large lump sum to start your business then you absolutely need a business plan - they will laugh at you if you don't have one! If you are an existing business then again you need a realistic plan to show the bank how you will generate the money to pay them back. Obviously you will be at an advantage if you already bank with the bank you want a loan from and they can see your bank transfers themselves.
As well as a plan you will be expected to put in around 20-30% of the collateral...if you aren't taking a risk with your money - why should the bank?
We have over 6000 business plans listed in our easy to find listings from 24 hour and DVD and Video Hire to Zumba Tuition.
So in short if you want a bank loan don't be afraid to go into the bank and just ask for it - especially if you have good credit and a good business plan.
Alternatively if you want cash to purchase a large shipment from China - then you might need to show that you can shift the stock if you have been trading a while. Purchasing in bulk usually means you can get a discount, which in turn means you can reduce the cost of your products to the paying customers, keep the same price and increase your profits or a combination of the two.
Obviously all businesses are different, circumstances change - you might think you have a new business idea, a new business opportunity, but what is new and novel to you - the bank manager who is in charge of your loan may have seen it all before, they might be in a better position to see that your business isn't really a great business to invest in...but you can only find out if you go in and talk to them.
Make sure you look around for the best deal though - a few percentage points difference between deals and you could end up paying hundreds / thousands more than from an alternative bank...so shop around.
Most people these days don't have a lot of savings to put into their business - so how do you raise the money in order to get the rest of the money you need? If this is you then take a look at other business funding options available to you.
Another question you should ask yourself is - "Does my small business really need to be loaned money" - take a look at business bootstrapping for other ways of keeping your business going.
Can you cut corners on your advertising budget? Here are some great free ways of advertising your business on the cheap.
Maybe your business is just to expensive to get into - if you really want to start up your own business - why not look at these low cost start up businesses.