Even if you have a small business that you have financed yourself there may be times you need more money than you can afford. At those times you will need to look to more traditional ways to fund your business. Commercial business loans are the most common means of getting funds for a business, but they can be difficult to obtain if you haven’t set up your company properly for funding.
Getting Started
The very first thing you need for the basis of good fundability is a business plan. There are many templates online for a good business plan. At its very heart, a business plan is a blueprint for your company and it tells investors and lenders what they need to know about its expenses and income potential.
When you are making your business plan, part of that will be making sure your company has all of the legal issues covered such as licensing and identification numbers. You need both IRS tax numbers and a DUNS number from Dun & Bradstreet to identify it for credit reporting purposes.
Developing a Credit History
Before you can get accepted for commercial business loans you need to prove your credit worthiness. You can do this fairly easily by opening vendor accounts to establish your ability and willingness to pay your bills on time. After you have several vendor accounts with a track record of payments you can open several business credit cards to give yourself even more financial opportunities while strengthening your business credit. Along with credit you should open a bank account in your business name to develop a bank score that shows you have a good history of income and also gives an overview of your expenses in one place.
If you have taken the time to create a strong business identity and credit history, you can walk into a lender’s office with confidence. Getting loans for businesses today is not harder than it used to be as long as you are prepared. Even if you don’t need money right now, doing the right things for your company to prepare it and create business fundability will ensure you are ready whenever you need money to expand, get through tough times or buy property or equipment.