The best way to start a business is to prepare yourself. In this blog post, we will tell you how to keep a check financial health of the business.
Tip 1- Create a solid business plan
A business plan is a blueprint that offers a clear direction on what to do and when to do.
Tip 2- Prepare cash flow and profit loss forecast
It is important to have profit and cash flow forecasts outlined as per your business loan. This prediction should be done on the monthly basis.
Tip 3- Keep paper work up to date
Lenders really like the applicants who have all the paperwork handy. This means make sure all your documentation work including financial statements and income tax returns are completed and compiled. Also keep the bank statements handy.
Know how much you want to borrow
It is pertinent to know how much you want to borrow and where do you want to spend it.
Research about the lender
A successful loan application is sometimes as simple as finding the perfect lender. Don’t file a loan application until you have a deep knowledge about the lender and are confident about the lending guidelines. It is not unusual to interview 3-4 lenders before searching the right one. Make sure you do an exhaustive research about banks and non-banks.
How are you going to pay back?
The lender always have a keen interest on how would they get their money back, they call them as an exit strategy. The first is always through traditional repayment schedule principal and interest. The second is through the sale of the business or sale of guarantor’s assets.
It is crucial to think twice before you act when it comes to the money matters.