As a new business owner, obtaining capital for your business can seem almost impossible. While Crowdfunding tactics do work for some, you may need more money immediately instead of waiting for weeks. Signature loans are just the way to do so. Instead of completing an application online and hoping for an approval, show the lender how serious you are. Here are five simple tips to improve your chances of approval for a signature loan.
1. Improve Your Business Plan
By now, you should already have a business plan. But you need to make any finalized improvements and updates so it's flawless. You're going to present to the lender a complete package of why they should approve you for this loan. As a new business, you don't have the business financial statements that traditional lenders are looking for. So this business plan needs to include everything from projections to partnership agreements.
2. Give a Complete Listing of Your Customers
The lender needs to see you have reliable customers who are ready to place orders and do business with you. This places a bit of assurance you'll have some form of money to pay back from the business side of things. Present copies of receipts and purchase orders.
3. Show Your Efforts
No lender wants to take a gamble on your business if you're not willing to gamble yourself. Show them what you've already done as far as investments and strategies. Even showing you have a silent partner to help will split some of the risks.
4. Show a Detailed Plan of What You Need the Money For
You must show the lender exactly why this money is necessary. Simply stating that you need to purchase machinery and equipment to produce your products will not cut it. You should include:
- How many machines are necessary
- The volume of product this will create
- Quotes for the supplies
This will help answer the looming question of why you need that specific amount of money.
5. Show Your Assets
A company receives the signature loan. However, you as the owner are personally reliable for the loan. Just showing you have some sort of financial means to pay it back will make the lender more comfortable.
By constructing a smooth proposal, you are showing the lender you are serious about this loan. Many new business owners treat signature loans as a generic installment or payday loan. However, to achieve a larger loan, you have to bring a formal proposal to the table.