You need a bank loan?

When it comes to starting a business, there is an incredible amount of folklore about whether or not this is possible without bank financing.

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Of course, you can choose any route. If the end is unable to start, this is what you need to know before sitting on the bench.

Go with the flow (cash).

For a loan, you have to test the consistency of cash flow. Ask yourself:   Is my positive cash flow? Am I profitable every month? Have I been profitable for one or two years, at least?  Most banks offer loans at ease in a relationship of service a debt of about 3: 1. For example, $ 150 each month positive cash flow will take about $ 50 of funding. The most important thing is that cash flow is consistent. If your sales or earnings change or fall, you could land in the deep end rather quickly. You need data from tax returns, income statements and balance sheets to show that your business is the stable and profitable month.

Talk to an expert

If you go to borrow money, find a business advisor who can provide good advice. Counselors help determine what types are available and how much you want to borrow.

You must be willing to give up something.

The guarantee is a common source of secondary payment. It is not always necessary to borrow money but can help a personal guarantee. Banks are not in the business of selling their possessions and make a profit. But if your main source of payment is cash flow, providing assurance can be like the cherry on the cake.

How alternative.

The fact is that you can be close to being “safe”, but not enough for a bank. If you are not the right candidate for bank financing but are still well qualified for a loan, try what I like to call quasi-banking institutions.

Finally, if they reject it, try to understand why and do not let that stop you. If you hang all your hopes on something intimidating as funding, we will never get out the door. It is important to dream big, but start small. Back to the starting point when all else fails.

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