To get funding for a small business, try to get to know potential lenders before the funding is required, recommends Forbes. Lenders are much more likely to work with a familiar, trusted company. Before requesting money, it is important to know exactly how much is required. Asking for too much money may put off potential investors, but asking for too little may be detrimental to the business in the long run.Continue Reading
Small businesses should have financial affairs in line before seeking funding, notes Forbes. Between 700 and 800 is an ideal credit score, and personal debt payments should not exceed 33 percent of the company's gross monthly income. Lenders may also consider the company's longevity, record of incoming accounts receivables, industry risk rating and cash flow.
Once the small business is ready to ask for funding, it is important to choose the right source, states Forbes. Options include commercial banks, non-bank lenders, local regional lenders and alternative funding sources such as crowdfunding platforms or personal loans.
When applying for funding, prepare all necessary paperwork, including a business plan, the resumes of everyone involved, personal information and at least three years worth of tax records, recommends Forbes. The small business should also provide financial records, such as profit and loss, cash flow statements and a balance sheet.
It usually takes between two and four weeks to receive an answer, notes Forbes. Lenders may require additional documentation. Check the status of the application weekly.Learn more about Managing a Business