Tips For Getting a Business Loan #2
Getting a business loan: Considerations Before Applying for Financing
In part 2 of a 3 blog series on getting a business loan we examine several important aspects business owners should consider before applying for financing. The concepts are borrowed from small business author and Forbes contributor, Ty Kiisel. You can access the full article on Forbes.com by Ty Kiisel here. His book Getting a Business Loan: Financing Your Main Street Business is available on Amazon.com.
Part 2: Making sure your extra capital has a positive impact
In part 1, we discussed how extra capital is always an asset. However, with borrowing comes risk and ensuring the extra capital you secure adds value to your company’s bottom line (rather than derail it) is crucial.
Some small business owners vow to never take loans or to receive external financing because they believe their company should be able to support itself (and if unable, then the business would be perceived unsuccessful). This is a common misconception. Looking for an injection of additional capital to generate more business can be one of the smartest decisions an owner can make. Managing this additional financing needs to be a priority.
You may be asking, how can I effectively do this? Focus on the amount of capital your business truly needs in order to achieve short-term goals by following these steps.
- First, identify what you want to achieve (your goal).
- Make your business goal(s) measurable (ex: I want to purchase an additional 5000 units by end of Q3 2014 to sell by end of Q1 2015).
- Set up a method to track meeting this goal to assess your return on investment.
- Start tracking!
In next week's post, we will look at the importance of knowing your numbers as it relates to your business loan application.