If you’ve always dreamed of starting your own business and building it into a successful venture for years to come, chances are you’ll need a little help along the way. You are not alone! Most small business need a lot of support when they first get started, and even established and successful businesses often need some extra support as they focus on growth and stability. To make your business work, you will need to draw on your family, your friends, and of course your own boundless creative vision and passion. You will also need a strong bank standing behind you. One of the most important first steps for many startups and businesses on the edge of exciting growth opportunities is securing asset financing, which has much lower interest rates than a credit card. Good asset financing can give you the power to begin turning a dream into reality.
So how do you get your first asset financing? A good bank will be asking three main questions when they evaluate your application:
- Can you pay it back?
- Will you pay back it back?
- What are you going to do if you can’t pay it back?
Everything you do in your application should be designed to answer these questions as clearly and honestly as possible. Here’s How:
Show Off your Vision
Spend some time outlining all of the important points so that you can articulate them clearly to your bank advisor. Think carefully about why you want asset financing. What are your goals for this money, and how will you achieve them? If you are starting a brand-new business, you’ll need a carefully thought out and well supported business plan, including realistic opening day balance sheets. If your business is already established and looking to grow, show off your great potential with financial statements from the last few years and information on your annual revenue, receivables, payables, and outstanding debt.
Put Some Skin in the Game
A good bank wants to see that you are invested in your own business as well, and will reward your commitment. Don’t be shy about sharing your own investments and the investments of your family and friends.
Remember the Bottom Line
Most of all, design your application in order to prove that you are a safe and reliable player for your bank to place its trust and investment in. You should have a good personal credit score, and do everything you can to boost it. If your business is established, you should also have a good business credit score.
In the worst case scenario, you also need a backup plan to pay back your asset financing. Should your plan not come to fruition, you will need sufficient collateral to fulfill your commitments. Collateral can be your business assets, such as inventory, or your personal possessions, such as a car or even a house.
If you aren’t able to provide sufficient collateral or a great credit score, you can also find a cosigner with an impressive line of credit who agrees to take responsibility for the asset financing if you are forced to default.
With your new asset financing, your own creativity and skill are your only limits! Go build your dream company.