ritical Things to Avoid While Seeking a Loan for Your Business
Ignoring other financiers
Having had success with one lender most borrowers hardly venture further down the road. When they find themselves in serious need of funds their sole financier is usually incapable of helping. Approaching as many financial institutions as possible is wise and expands your options, insuring yourself for hard times should they come.
Meet as many lenders, different institutions and bankers offering diverse types of loans and give them a hearing. If you use a variety of suppliers, always diversifying your clientele and approaching all manner of insurance companies or personal investment ventures before you make up your mind, apply the same when it comes to borrowing for your business.
Weak lender persuasion
Making a pitch to a lender will determine whether you get the funds you seek. If you don’t really understand your business plan, the entirety of the project, competitive benefits and past and recent performance of the project the banker will politely refuse to finance your business.
Before approaching the banker, prepare as much as you can, practicing and internalizing the entire business plan and understanding your project perfectly. You must persuade the lender about the project, how the money you seek will be used and exactly how the project will repay the funds.