10 Business Lending Tips

1. Seek advice from reputable professionals.

There are now more funders than ever with new products evolving all the time so it is

important to speak to someone that has a good reputation with sound & honest

knowledge of the funding landscape. The advisor should then spend time understanding

the business and its funding needs. This will entail a challenging conversation with the

advisor(s). This then allows the right solution to be found. Do not turn to Google as this

will likely result in going with a lender that spends more on marketing rather than being

the correct solution for your business.

If in doubt speak to your own Legal Team.

2. Plan ahead.

Whilst the funding market has changed, which enables allowing funds to be accessed

quicker through the evolution of technology, However always pause to think ahead. If a

business can understand when they are going to need funding over the coming year, not

just weeks, it allows them to access the correct funding solution and also removes speed

as a deciding factor when choosing the right funder. Unless the funding requirement is

reactive to an event that has occurred, speed shouldn’t be a deciding factor. Think

before you make your decision.

3. Plan B.

Always have a couple of feasible options for your funding; either different lenders or, if

possible, different products. This will allow you to compare solutions, but will also likely

result in getting a better deal as the lenders will compete on price if they are aware that

there’s competition.

4. Decide what’s important to you.

Work out what are the key deciding factors when choosing a funding solution for your

business (aside from cost as this should always be a factor). Service, the use of

technology, personalities, brand awareness, reputation and location are examples of

possible deciding factors.

5. Ongoing relationships.

This is vital & especially important when the facility is not just a one off payment such as

a loan but a partnership over a period of time such as invoice finance. You need to take

into account who will be managing the facility on a day to day basis both internally and

externally and whether they have been part of the process. What information is the

funder asking for on a day to day basis and are you able to provide this, if not it could

cause issues in the future. What systems do they use and are they compatible with

yours or can the use of technology help with the management of the facility?

6. Think outside the box.

Be open to non-traditional means of funding. There’s a size and shape to suit every

business and your perfect match may be via a niched new technology. Each option will

have its unique benefits and downfalls and it’s about finding one that complements your

requirements. Appointing an advisor is the best way to ensure you’re finding your perfect

match.

7. Get your ducks in a row.

Ensure you have all documentation prepared before engaging and have reviewed it

stringently a number of times. A single miscalculation can be enough to deter an

investor. Be 100% confident your facts and figures stack up and be sure that you know

them inside out. Being over-prepared should be the end goal. No one knows your

business like you, so if you’re unsure on certain areas how do you expect a potential

investor to have faith? Think Dragon’s Den.

8. Start planning early.

Unfortunately, there are many layers to this process no matter what route you take. It will

likely take weeks, if not months for approval. Businesses should be thinking about

funding options months before they actually require the funds. Those who leave it last

minute run the very high risk of cashflow issues. Something which itself may hinder your

chances of receiving funding.

9. Deal with your personal credit history.

Your business is you and you are your business as far as finances go. Lenders will most

likely factor in your personal credit history when determining if you qualify. If you have

any concerns, an advisor can help address the issue and guide you through the best

options.

10. Believe.

You obviously believe that your business has legs to be in the position of looking for

funding, but that belief must shine through and be evidenced. Whether that’s via your

own financial stake or through ‘sweat equity’ of unpaid time. Investors are far more likely

to buy into a business if it’s clear the owner is absolutely committed to it.

This article is for general guidance only. It provides an outline, and may not include

points which are important to your situation. You should not depend on this blog without

taking advice based on the full facts of your case. The information given was correct at

the time of publication.

Remember these decisions are always important to your business, Take Your Time.