Are you wondering about the process of securing funding to start or grow your small business? Sylvia Browder, Project Director, Business Coach, and Consultant with the Women’s Business Center, Inc., based in southern Alabama, shares her expertise on this subject with American Small Business News Readers.
Q: What advice do you have for entrepreneurs who want to learn how to increase their likelihood of being able to secure the funding they need?
Browder: There are a few things that an entrepreneur should consider to increase odds of securing a loan:
- Be prepared to meet your banker: Make sure that you are thoroughly prepared when you go to your banker’s office to request a loan. You need to show your bankers that a loan to you is a low-risk proposition. Come to the meeting equipped with a well-prepared business plan and finance package.
- Identify how much capital you need: Have you determined how much capital you need? Why do you need this amount? Have you calculated your start-up costs? Is it to purchase new equipment, down payment on an existing business or do you need start up funds to cover operation? This will help you determine what type of lender you should approach.
- Have a good relationship with your local banker: The old saying people do business with people they know and trust. Well, if you have built a relationship with your local banker over the years, they are more apt to support you in your new business venture. Do you have your main business account with them? You should!
- Take time to review your personal credit report and finances: Your credit score is sure to play an important role in your personal finances. If you think that your personal credit won’t affect your ability to get a business loan, think again!
- Make sure your house is in order: Your credit score not only determines your ability to get credit, but also affects the interest rate. This includes paying down your credit balances and taking time to take care of issues prior to your meeting with the bank. If you cannot handle your own personal finances, he’ll question whether you can run a business.
- Check out resources such as Small Business Administration: The U.S. Small Business Administration (SBA) is a federal agency, responsible for assisting and protecting the interests of American small business. The agency operates through a series of field offices around the country as well as in partnership with public and private organizations to offer technical assistance to small businesses. The Women’s Business Center is funded in part by an SBA grant., and we offer technical assistance to small businesses.