Getting Help with Bank Funding
In most cases, getting funding from a bank for a small business start up is extremely difficult. Banks see too much risk when considering a start up and often refuse to loan the money as they don’t see any return on their investment. But it doesn’t have to be impossible. Let’s look at some ways you can increase your odds of being approved for funding for your small business start up.
Do Your Research
The very first thing you’ll need to do before seeking funding is determine what your business will be. If you know you will need bank funding, do your research about what types of businesses are most likely to get funding. Traditionally retail and food endeavors have high failure rates, so if that is an area you are considering, you should keep this in consideration.
Once you’ve decided what your vision is for your business, you’ll need a plan. Before meeting with a bank about funding it is essential to have a thorough business plan that covers the details of your business, especially the financials. You’ll need to have a good grasp on the startup cost, the expected expenses associated with running your business, and your projections about profitability.
Prepare Your Finances
Once you have a good business plan, you’ll also want to make sure your finances are in order. Having a strong credit score is essential if you hope to borrow money from the bank. The bank will weigh the risks and determine if you are high risk or low risk, and if your credit is not good, they will see you as too high of a risk.
In addition to making sure your credit is clean, you’ll also want to have a significant amount to invest in the company, whether it be collateral for the loan, or a matched investment. The bank will feel more comfortable lending money if they know you are taking a personal risk as well.
Preparing a business plan and personal finances can be very overwhelming, but there is help! By working with a Maryland business consultant you can prepare your business plan and documentation for your meeting with a bank. Working with a second set of eyes on your finances and plans can help you see areas of weakness and strength and help make adjustments accordingly. They can also offer an expert opinion on how you can improve your strategy.
At CFO Source our goal is to help small businesses flourish. By choosing our Maryland CFO service, you will work with a team of professionals who can create a strong business plan and give you bank funding tips. If you are in the beginning stages of a start-up, give us a call today to discuss how we can help you be successful!