Tips of getting the best loan
Often, the hardest part about starting a new business is to raise the money that is required. While the most obvious sources are your own savings and investments from your friends and relatives, you should definitely consider institutional sources of funds such as banks or finance companies. Without a track record or a history, you will find it difficult because you will be told that yours is a high risk loan. However, you may succeed with lots of effort and persistence.
Remember the banks are in the business of giving loans so do not hesitate to approach a bank loan officer. To improve your chances, try and find a bank that has lending experience in your industry and deals with your competitors. They will find it easier to analyze and accept your business plan. Also try and find a bank that specializes in lending to small business and, if possible, participates in government small business finance programs either by way of funding or by way of loan guarantees.
Be totally prepared to demonstrate that lending to your business is not a high-risk proposition. Prepare a comprehensive and complete business plan that includes all your assumptions as well as your financial projections. Anticipate every single question that you may be asked and be prepared to answer promptly and confidently. In fact, you could incorporate some of the answers in your business plan so that the loan officer does not even need to ask the question. For instance, highlight the risk aspect of your business. No business is free of risk and you will come across far better if you present the risk associated with your business and how you propose to manage these risks.
Do not be negative or tentative in your approach and your presentation. If you are confident about what you have to say and project this confidence to the listener, you will come across as reliable and credible. You have to be seen as an entrepreneur who knows his business backwards and will meet his loan repayment obligations.
On the other hand, if you are looking for a mortgage refinancing loan to save on your interest payments or cash in on your home equity, here is how we should go about it. Research all the different types of mortgage lenders to see who is the most suitable for your requirements. You can also use the services of a mortgage broker who will act as an intermediary between you and the mortgage provider. One advantage of using a broker is that he has access to a wide range of mortgage lenders and will normally arrange the mortgage refinancing for you on the best possible terms and conditions. You should however remember that some companies operate both as brokers and as lenders and often brokers will not identify themselves as brokers. It is important to know this because the broker’s fee will be added to your cost.
Before you make up your mind, shop around vigorously and get as many quotes as you need from both brokers and lenders. You can then compare the terms and conditions to ensure that you are getting the best value for money deal.
