Considering the current economic climate, post the effects of the economic collapse in 2008, most people would be surprised to find out that the start-up rates for small business is booming. Statistics for 2011 indicate that the number of newly launched businesses rose by 360,000, which is a 9.4 percent higher than 2010. This figure is the highest that the economy has experienced since the 2007 credit crunch. For any business to succeed, it will need the required amount of resources to finance its operations. Here are some tips on business and finance, to ensure that your business is well funded to meet its targets.
Unless you have a very rich benefactor who is willing to finance your business and finance plans, you are more than likely to look to a bank for financial backing. Financing a business with a loan offers it a better chance of success than an overdraft. Business loans will typically last for 1-10 years and the prearranged repayments make it easier for a business owner to budget their finances.
The first step applying for a business loan is coming up with a comprehensive and realistic business and finance plan.
Your business plan should realistic with its forecast for monthly sales and expenditure, while the budget should be sensible and workable. There is no point in coming up with wildly optimists claims about predicted returns, or understating the amount you will need to get the business up and running in the hopes of impressing a bank. Most banks are well aware of all the tricks, and will not look kindly on your application in such a circumstance. In order to come up with a comprehensive business and finance plan, you should include come up with a worst case scenario, and have extra funding for any unexpected glitches.
You should carefully assess your business and finance needs, in order to come up with an accurate figure for the full amount you will need to fund your business venture. It is always advisable to provide the bank with a full and accurate figure of the amount you need to fund your business, rather than make smaller request for funding. The more aware the bank is about your financial needs, the more comfortable they will feel about funding your business. From that point of view, the bank can determine how to schedule your loans if need be.
The news can some times be wrought with negative publicity on business and finance sources. It is not uncommon to here news stories that banks are reluctant to lend to small business owners. Don’t be fazed by this negative publicity. Banks are still lending at a rate of $800 million per month, with small businesses estimated to hold over $59 billion in outstanding loans.
Make sure to shop around for the best deal, as interest rates can vary. Some lenders may be willing to offer your business and finance a holiday period, to allow you business to build up a stable level of cash flow before you can start make your repayments.
Sources and Citations
Make sure to keep track of the business and finance incomes and expenditures, and make the required adjustments at the first sign of trouble.