If you’re thinking of starting a new business, you will most likely need to raise some capital before you can get your business venture off the ground. Even when it comes to starting a business which is among the cheapest to set up and run, in most cases there will be some amount of funding necessary in order to ensure that your startup gets off to the right beginnings. But, securing business funding for first-time entrepreneurs can often be a little tricky, with many finding that banks and other lenders reject their applications for a number of reasons.
When it comes to getting a bank loan in order to fund a new business, more and more budding entrepreneurs are being rejected and forced to find alternative financing methods or give up on their dream. So, if you’re about to apply for business funding, it’s good to know what you can do in order to increase your chances of having it approved.
Update Your Resume
When you apply for business funding from a bank or another lender, most of the time they will take your personal history into account when it comes to deciding whether or not you are eligible for a business loan. Many lenders will use levels of risk as deciding factors when it comes to funding new business ideas, and your personal experience and skill when it comes to managing or running a business will most likely be taken into consideration. Because of this, updating your resume to ensure that it makes a good impression and showcases your previous work experience and how it has laid the foundations for becoming an entrepreneur is important. In order to achieve a resume which is going to win over the favor of lenders, you might want to consider using an executive resume writing service.
Have a Business Plan
One of the biggest mistakes that many new entrepreneurs make when it comes to securing funding for their business venture is not having a properly laid out business plan when applying. Before you even begin to think about applying for funding for your business, it’s absolutely vital to put together a detailed business plan, which covers a range of different plans for various situations such as how you plan to deal with competition, how you will deal with hiring employees, how your brand will be marketed to customers, and your plans for eventually breaking even and making a profit. Having crisis management plans in place for finances and business reputation included in your business plan is also important so that lenders can be sure that you have a clear idea of how you are going to overcome the various obstacles that new entrepreneurs face and lead your business into success.
Pitch When Possible
If you have the opportunity to pitch your business idea to lenders in order to secure a funding deal, you should definitely jump at the chance to take it. Although pitching your business ideas to lenders and investors can often be a nerve-wracking experience, it can also be a great way for them to put a face to a name and get to know you a little in person, rather than simply reading about you on your application and by carrying out background checks. Pitching your business idea to lenders or investors also gives them the chance to ask questions and clarify any details which could be important when it comes to making their decision regarding offering you business funding.
Although there are plenty of things that you can do in order to increase your chances of getting a business loan, in some cases it simply won’t be possible for you to get one. There are many different reasons as to why business loan applications are rejected, and sometimes, simply having a good resume and a solid business plan isn’t enough for your application to be approved.
However, being rejected by the bank for a business loan doesn’t mean that you will need to give up on your dream of running your own company. There are many different alternatives to getting a bank loan when it comes to business funding. For example, crowdfunding, where you will raise the money for your business using donations given by the general public can be an excellent alternative to a bank loan when it comes to raising the capital to start your new business.
Getting funding for starting a business can often be difficult, but when you are aware of the obstacles that you might face, it becomes easier to tackle them.
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