How to get a business loan
Here’s a simple, four-step guide to applying for business funding quickly and easily.Obtaining finance can be challenging for small business owners. After all, cash flow challenges can be common for businesses in their early stages. If you’re already prepared to apply for a Prospa Small Business Loan, apply here. If you’d like to learn more about the loan application processes, continue reading. For small business owners needing access to business finance, these four tips could get you closer to being approved, not declined.
1. Organise your documentsTraditional lenders in New Zealand will demand all paperwork relevant to your business’s prospects of success, and they won’t begin to assess your application without it. These documents can include a business plan, a competitor analysis and financial statements like profit and loss, cash flow forecast, revenue projections and much more. Online lenders like Prospa, however, go out of their way to make it easier for small businesses. Unlike traditional lenders, our loan application process is much simpler, and depending on the amount you want to borrow, fewer documents are required. That means you can spend more time focusing more on growth opportunities and less on admin.
2. Check your credit scoreCredit history is one of the most important factors for traditional lenders. Lenders will obtain a copy of your credit report, so it’s crucial to examine yours before applying. Otherwise, you may not understand what sort of negotiating platform you’re starting from. Even if you think your record is clean, double-check it to ensure there are no inaccuracies or nasty surprises. Remember: every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is logged. Credit providers may take a negative view of multiple inquiries made in a short space of time, which can affect your ability to obtain credit and the interest rates you are offered. You have the right to obtain your credit score and request a copy of your credit report to correct any wrong information. There are several credit reporting companies in New Zealand, including: Prospa Small Business Loan.
3. Master your business pitchObtaining business finance from a bank is essentially a pitch. You’ll need to sell yourself, your business and your plans for growth, while being both professional and passionate. This can be daunting for those with little experience presenting or selling, so it’s a good idea to:
- Rehearse and think of any possible questions you might be asked.
- Be ready with evidence to back up how you will overcome specific business finance issues. One way to do this is to prove your ROI or showcase your business growth in easy-to-read graphs and charts.
4. Know your securityTraditional lenders often require the borrower to offer an asset as security upfront against the loan. This could be property, a vehicle or a piece of equipment. Before locking in your personal assets as upfront security for a loan, you should always consult with those who will be most affected, like your family or business partner. And if you aren’t comfortable doing so, then there are trusted online lenders offering small business loans that don’t require upfront security to access the funds. Consider if this option may be more appropriate for you. This article was originally published in 2018, but it’s remained one of our most popular articles ever since. We’ve given this article a quick refresh to provide further insights into getting business funding quickly and easily. Need access to cash, quickly? See how a Prospa Small Business Loan could help – apply now.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisers. Although every effort has been made to verify the accuracy of the information, we disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.
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