How to get a business loan?

The professional loan is a credit granted by the bank to allow you to carry out various projects. However, it is not always easy to convince banks in this kind of situation. To make sure you have the odds on your side, there are plenty of tricks you can use. These will allow you to obtain your financing more easily. Do you want to discover the elements to be gathered to have a professional loan? This article tells you how to proceed to achieve your goals.

The adequacy between the means and the overall financing of the project

Before granting you a  professional loan , financial organizations generally want to ensure that your personal resources are proportional to the overall cost of the project. It is more precisely a question here of seeing if you have a sufficient personal contribution. In this regard, there are quotas that most banks take into account.

As part of the creation of a business for example, you must be able to finance the project up to 25% at least. In addition, for a resumption of activity, you can have a personal contribution of 20% of the total amount required by the project. When you meet this condition, banks are more inclined to easily grant you a business loan.

It should be noted that if you do not have the necessary personal resources, there are many structures that can help you mobilize a significant personal contribution.

The profitability and financial balance of your project

A professional loan is based on a business project that you wish to finance. This detail is very important with banking establishments. Indeed, the banks will analyze your business plan to determine if it will be profitable. To convince financial organizations, you must establish a fairly consistent budget.

The latter must be balanced and take into account the unforeseen. This roadmap should also highlight certain important aspects of the project such as the feasibility study. You will be more likely to have a professional loan with a solid and viable project.

The level of training and skills

Even if this element is not often taken into account by the majority of entrepreneurs, it is obviously a very important detail. Indeed, if it is good to have an excellent idea for a project, it is also essential to be able to carry it out. The bank, before granting you a professional loan, ensures your ability to implement the project you have submitted.

Thus, for regulated professions, it would be interesting to provide proof of your qualification or your diplomas. At this level, you should know that experience in the sector of activity of the project is an added value for your loan file. Indeed, this allows the banking institution to know that you have a perfect command of the field of activity.

Thus, there is less risk of project failure. You should know that the bank prefers to lend money to people who have a perfect knowledge of their field. They will be able, thanks to their experience, to find solutions and anticipate certain hazards in order to carry out the project.

In some cases, you may not have the necessary skills. However, it will be necessary to clearly notify the bank how you intend to manage the project. If necessary, proof of the skills of the invited actors must be added.

Sound management of your personal accounts

Even if the business bank account is separate from your personal account, the latter can impact your business credit application. Indeed, the bank, before lending you a given amount for your activities, can scrutinize the management of your personal accounts. This gives them insight into the type of debtor you may be.

To facilitate this procedure, you will be asked for your latest bank statements in your file. In order to guarantee your chances of obtaining the professional loan, you must opt ​​for good management of your personal accounts. Thus, you must avoid having overdrawn accounts, having a lot of bad debts, overspending, etc.

With sound management of your personal resources, you are already giving the bank insight into how you will be able to handle the loan amount. The financial institution will then have an easier time granting you financing. Furthermore, it is important to emphasize the phenomenon of indebtedness. You have to be careful not to get into debt.

Indeed, the more you are indebted on both sides, the more the bank will be reluctant. Financial organizations do not like to take the risk of lending to an insolvent debtor. This is why they prefer to grant loans to people who can easily repay the monthly payments.

Savings and other income

Speaking of monthly repayments, you should know that your personal wealth is large enough to obtain a business loan. Indeed, the bank will find it easier to grant you credit if you have significant savings and substantial monthly income.

In this way, the financial organization incurs less risk. Thus, depending on your income and other financial resources, it will be easier for you to have a business loan.

Kokou Adzo

Kokou Adzo is a seasoned professional with a strong background in growth strategies and editorial responsibilities. Kokou has been instrumental in driving companies' expansion and fortifying their market presence. His academic credentials underscore his expertise; having studied Communication at the Università degli Studi di Siena (Italy), he later honed his skills in growth hacking at the Growth Tribe Academy (Amsterdam).


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