Starting a business is incredibly difficult – so is growing a business, expanding a business, moving a business and keeping a business steady. In short, owning and operating your own business is not so simple.
So, how do people find the right kind commercial lending?
Step 1: Have a plan
Whether you’re an ambitious entrepreneur seeking to launch your first start-up or a seasoned business owner hoping to expand into a new market – your business plan will always start with a big idea.
Maybe you want to open a new donut store or your manufacturing business grew out of its original space, and you’re looking to bring your revolutionary invention into new markets to increase profit.
Step 2: Start thinking about funding
Existing business owners and start-up entrepreneurs rarely have the cash-on-hand they’ll need to perform their plans. Unless you’re extremely wealthy or have a third-party investors, you’ll likely need to explore commercial lending options.
From national corporate banks to local community credit unions, there is a wide range of financial institutions that offer commercial lending plans. Research all of your options, and choose the one that best fits with your business goals.
As you consider your funding options, pay close attention to both your business projections and individual finances. Lenders will research your personal financial records, including your credit score and cash flow.
Step 3: Commercial lending needs you to develop a business plan
Before you decide to present your commercial loan request to a lender, you need to develop an in-depth, big-picture business plan.
In order to obtain a commercial loan you will have to answer the following:
- What is your business? You know your business better than anyone – and it’s important that your lender sees that you’re passionate about your idea and genuinely believe it will succeed.
- What do you want to do with the loan? Financial institutions take on a great deal of risk when they approve a loan. The commercial lender will want to know precisely where you’ll be investing every dollar of your loan.
- What do the numbers say? Lenders will want to see carefully calculated, accurate fiscal projections. Most commercial lenders typically want to see three years’ worth of financial information.
Prior Years: Past two years of financial information, if applicable.
Year 1: Month-by-month projections
Year 2: Quarterly projections
Year 3: Annual projections
The answers to these questions are vital to securing a commercial loan. Take your time and make sure your plan accurately represents your business.
Step 4: Secure your loan, and bring your idea to life
The commercial lending process can be intimidating, and because of that, great ideas are too often written into forgotten journals and lost in file cabinets.
The business world is built by folks who combine their big ideas with big-picture strategic planning and prudent business management. If you have faith in your business and you have the ambition to put in the work you’ll see your idea come to life.