Aug 13, 2021 (AB Digital via COMTEX) -- Most businesses take on outside funding at one point or another. According to Federal Reserve, 59% of companies that apply for funding are looking to grow their business, 43% need to cover operational expenses, and 26% are refinancing.
Regardless of the business goal or funding source, all business owners need to make sure their company is prepared when they decide to apply for funding.
“Start with getting all of your financial documents in order. Banks, financial institutions, and other prospective lenders will want to examine your company's financial situation to determine whether you're a good risk for them to take,” said Scott Crockett, Everest Business Funding’s CEO.
So, before you apply for business funding, make sure you have a copy of your up-to-date balance sheet and profit and loss statement, the last year of bank statements for the business, and the last two years of tax returns for both the business and your personal taxes.
Next, check your personal and business credit score to make sure everything is in order. If it's not, then it might be worthwhile delaying your funding application until you can achieve a better credit standing.
Keep in mind that many lenders will analyze your personal financial situation and credit history as well. This will give them more confidence that you can personally repay the loan.
One of the most important stages of applying for business funding is presenting your case. Lenders want to know your business' story, its history, how it got to where it is today, and where you plan to go.
They'll be particularly interested in knowing why you need the funding for which you're applying. Business owners need to have a good story to tell so potential lenders can see have a plan in place.
To make it more a realistic goal and less of a pipedream, create a business plan backed by data that you can present to potential lenders. This plan should draw on your past and current financials, as well as projections based on what you'll do with the funding.
A key to long-term success in business is ensuring you obtain the best terms for the funding you secure.
About Scott Crockett
Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett’s track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.