What you will need for business financing

Most businesses need additional financing at some point during the business life cycle. This often leaves business owners scrambling to find ways to get the money they need for additional inventory, new equipment or whatever type of purchase they need to make for their business. It can be especially difficult to obtain business financing in the current lending climate. However, business owners should know that if they take the time prepare and have what they need, the chances are far higher that they will be successful in securing the additional business financing. Here is what you will need for business financing-

- Start with your credit-Even before you begin the process of seeking out business financing you should pull both your personal and business credit reports. Once you receive them you should go over both them carefully. You want to make sure that there are no mistakes or inaccurate information on either one. If you fail to do this you may find the entire loan process coming to a halt. Do not make the mistake of thinking that only your business credit will matter. Potential lenders will feel that if you are not a good personal money manager you are not a good risk for a business loan. Finally, keep in mind that it can be a lengthy process to correct mistakes on a credit report so the sooner you start the better off you will be.
- Present a well written business plan-You should not believe any rumors about a business plan not being necessary to obtain business financing. The reality is that any potential lender will be looking to see what your business plan contains. They will want to know what your plans are for the money and most importantly how you plan to repay it. You will need to make sure that your business plan defines exactly what your business will do, who your target market is, and why they will want to buy from you. You should also be able to outline your business goals and how you will achieve them in your business plan. Finally, do not overlook the management section of your business plan. Savvy lenders understand that what they are really investing in is the people who run the company, not the products or service so be sure and show them in your business plan that you and any other management are the right people for the job.
- List of assets-Your lender will be looking to see what you are willing to risk for your business. Whether your business is brand new or has been around for awhile you should not assume that your lender will offer you 100% of the money that you need. You will need to show what assets can be pledged toward the business financing and what amount you are personally willing to risk in order to get the business financing that you are looking for.
- Financial documentation-While your overall business plan will be read it is important to pay especially close attention to all of the financial aspects of your business plan. One of the most important sections will be the potential for profit that your business has. Your lender will be looking to see if your business will have long term potential in your market. It is highly unlikely that you will receive business financing for a business where you cannot show this type of financial potential. This can be done by showing that you understand your market and where your products or services fit into it. If you currently have a product or service that will not be able to maintain a long term potential you will need to have a plan as to how you will modify it over time in order to maintain your market share. Only if you can do this will potential lenders consider offering your business additional financing.