If you’ve found yourself with an exciting new business opportunity that you can’t wait to bring to life, you may be looking for ways to finance it. Starting a business can be thrilling, but looking for ways to get it off the ground requires some form of capital investment, which you may not always have at the beginning. After all, you need to spend money to make money!
Fortunately, there are many ways to do this, like securing a commercial loan. Many lenders in Australia can offer you a fantastic loan that can help you realise your vision, although they’ll come with their own set of criteria you must meet. The good news is that you can do a few things to improve your chances of getting approved for a commercial loan. Here are five tips to follow:
1. Shop Around
When you purchase anything, like a new smartphone or computer, you always make it a point to do your research. The same applies to looking for a lender that can offer you the right product for your needs. Shopping around for lenders will give you access to various quotes and products, giving you a wide variety of options. Sticking to the first lender you find may not be ideal for your situation, as lenders have various criteria that are often rigid, which means you’ll have more chances of being turned down. Instead, by comparing loan options, you’ll secure the one with the most favourable terms that will help you start your business on the right foot.
2. Prepare a Solid Business Plan
Once you’ve drawn your list of potential lenders, you’ll need to develop a proper business plan. Writing one can seem challenging, but getting help from a business consultant will move things along and ensure that your plan impresses the lenders. It will also show them that you’re trustworthy and determined to make your business idea happen, and you have a road map to guide you along the way. By being well-prepared, you’ll have no difficulty convincing lenders to offer you an outstanding commercial loan!
3. Compile Your Financial Documents
Your business plan must include many different things, like future profits, running costs, and liabilities. However, if you’ve started your business and needed a commercial loan many months later, then your lender would want to see your past financial documents, like profit and loss statements, income tax returns, and an updated list of assets and liabilities. Lenders always request specific financial records, so provide them with accurate paperwork to boost your chances of getting approved for a commercial loan.
4. Always Start Early
It’s always better to start preparing early, even when lenders promise a quick turnaround time. Unexpected delays frequently pop up, and if you don’t anticipate this, you might find yourself in a tricky situation, mainly if you rely on a loan to buy new equipment by a specific date. To avoid possible complications and disappointment, always start early and expect the occasional delays. After all, failing to plan is planning to fail!
5. Have Realistic Expectations About Repayments
Lastly, securing the right commercial loan for your unique situation requires you to have realistic expectations about your ability to meet repayments. In fact, this is the most crucial factor you must reflect on before applying for a loan. Consider speaking to a financial advisor or accountant and ask if the loan amount you’re looking at is realistic for your situation. They’ll give you objective advice that will help you determine your ability to afford the loan or if you need to ask for a lower amount and adjust accordingly. You can also decide to secure a loan at a later time when you have more funds.
Getting a loan to fulfil your exciting business idea is one step toward exploring an opportunity that can ultimately change your life. However, you’ll need to make sure that you are fully prepared to apply for a commercial loan to improve your chances of being approved. By following these tips, you’ll find the perfect commercial loan in no time.
FinanceCorp is a team of mortgage brokers that can help you with all your financing needs in Perth. All of the Finance Managers at FinanceCorp are fully qualified, trained and experienced mortgage professionals who live and breathe finance. Contact us today to find out more about how we can help you secure a commercial loan!