Tips to help you acquire business financing

No matter what you try, you will find yourself in a position where you need more money from time to time. Every business could use a little more money to pay for raw goods and other things. You will need to acquire business financing from traditional and non traditional lenders in order to expand your business and have the money you need in a timely manner. Lenders all have different standards pertaining to their lending requirements but there are a few basic things that they will look for when they are granting approval for business financing.

Tip # 1 - Know your credit
What does your business credit look like? Have you been able to repay your other loans in a timely manner? Have you demonstrated that you can be trusted with money? Lenders will look for borrowers that have a high Paydex score in order to reduce their risk load and justify offering you a loan. Timely payments to your lenders will help to improve your business credit rating and improve your chances of acquiring business financing. A good business credit score is another over 80, which is easy to obtain with timely payments.

Tip # 2 - Focus on your business plan
Lenders are going to focus on the amount of risk you post to their business. They will look for businesses that pose the least amount of risk possible. Having a solid business plan can help you acquire business financing as you will show lenders what your business is all about. In the business plan you will define what your business is, what your products are, who your target market is, and if you really do need the amount of money you are asking for. Make sure you include some business goals for the company. They need to see goals that you can actually accomplish in order to offer you the money you need.

Tip # 3 - Sales
Lenders will also take a look at your sales in order to justify offering you a loan. Business finance options are limited so the lenders need to be sure that you can afford to take on another loan and that you can repay it in a timely manner. Depending upon the amount of money you are asking for, you need to look at your credit card sales and consider using them as collateral for the loan. As long as you are drawing in about $2,500 a month in credit card sales, you will be able to receive credit card advances from lenders.

Tip # 4 - Business assets
To help lenders see that you don't pose a big risk, take a look at using some of your business assets to secure the loan. Heavy equipment and machinery can be used to secure a loan for your business. Other options you have for business assets include your investments along with sales. As long as you have a strong cash flow, you should be able to use it to secure the loan.

Tip # 5 - Cash flow projections
Another thing you need to do is come up with cash flow projections. Lenders want to see that you have a future ahead of you. They need to see what type of money you are planning to make in the future in order to justify offering you the loan amount you are asking for. Use your cash flow statements from the past to come up with the numbers for the future. This is a great way to show lenders that you have strong numbers and that you aren't just setting your goals too high for you to actually achieve.