A new year comes with new promises and 2013 is no different. If you are a businessperson, it is a year you hope to achieve higher profits than the recent years over which the economy has been recovering sluggishly. Business finance is an integral part of any business and you have to handle it well. There are several things that you must consider when looking for business finance in 2013 as outlined below.
Considerations When Looking for Business Finance in 2013
Ability to repay debt. Determining the amount you need for your business is not enough. How you will repay the debt is more important. 2013 is no different from other years because businesses will still take a few months before they can generate enough revenue to repay the debt. Lenders are aware of this and will review your past financial history to determine your suitability for financing.
Persona credit score.
This is very important as it is correlated to how you will deal with business finance lent for your business. It is essential you know your credit score. A strong credit score is considered to be one above 720 and most of the leasing companies only consider business finance applications with a minimum score of 650.
This is a requirement for any form of business financing. It is especially important if your credit score is low or considered as weak. The equipment, real estate or any other form of asset you own may be used as collateral when you are seeking business finance.
Proof of ownership.
Before you can acquire financing for your business, you must be prepared to disclose fully the ownership of the business. This applies to anyone who will own 20 percent or more of a particular business. Verification is normally done using IRS documents.
Use of the equipment or cash.
You must go beyond saying you need equipment and cash. Plan how you will use them both well in advance. Show how the equipment is essential to your business and how any additional capital injection will help you to purchase inventory, consolidate your debt or grow your business. Prepare a detailed list of equipment from vendors, include product specifications, your intended location as well as the delivery dates.
Lastly, remember that it is just business. You are the leader and no one will be more passionate about it than you. The source of business finance, whether it is a partner or bank will not be emotional about its performance. The lenders are just interested in ensuring they get their money back as agreed and it is your responsibility to ensure your business scales the heights you aspire.
Business finance will always be part of any business, whether it is a start up or a well established business. Even in 2013, the rules are the same and you only need to be smarter than the previous years. There is little you need to do differently. Pay keen attention to market trends and ensure your business is ready for the booms and recessions it will encounter throughout the year.