Without a business loan or business credit, it can be difficult for a starting entrepreneur to make an investment in a company. Whether it is about starting a business, hiring new staff or expanding a building, all these things require money. It does not have to be difficult for both novice and existing entrepreneurs to apply for business financing in the form of a loan or credit. However, a number of things must be considered, especially by a starting entrepreneur. Therefore, here a checklist for applying for a business loan or a business credit.
The business plan
It sounds very simple: as a starting entrepreneur, a lot of money is needed. It is not without reason that a company gets off the ground. Materials, means of transport and personnel also cost money. This is often about amounts that are not put on the table, so a business loan or business credit can offer a solution. In some cases this can already take the form of a microcredit. To apply for this, the starting entrepreneur must convince the lender. Why, for example, does the new company have a chance of success? What can help with this, for both the entrepreneur and the lender, is a good, fully developed and up-to-date business plan. In some cases this is also called a business plan or business plan.
The business plan explains the plans of a starting entrepreneur in detail: what is the product or service, what is the price and what is the expected profit? The plan goes into the idea very deeply, so that it is clear to the lender what the new entrepreneur’s intention is. For example, it is necessary to find out which market is being targeted, who are the potential customers, whether and who are the potential competitors and how the new company will distinguish itself from the rest. It is not interesting for a lender to invest in something that is not going to work at all.
More matters are interesting for a company’s business plan. For example, whether a person is hired, where the company will be located, whether the entrepreneur is also an employee in addition to the new company, whether permits are required to be able to carry out the work and who will do the administration of the company.
When these matters are reflected in the business plan, a lender is more likely to agree to the application for a business (micro) credit or a business loan.
The financial plan
In addition to the business plan, the lender will ask for more documents. For example, it is good for a starting entrepreneur to put together a well-rounded financial plan. It answers several questions about money. For example, how much money is needed to start the business, where should it come from and how will the money be used? The lender must recognize in the financial plan that the new company has a chance of success by using the correct figures. However, honesty is very important in this; the lender may reclaim the credit all at once if it later emerges that incorrect information has been included in the financial plan.
A number of budgets are also included in the financial plan of a starting entrepreneur: an investment budget, an operating budget, a financing budget, a liquidity budget and a personal budget. After all this information has been provided by the starting entrepreneur to the lender, he will check whether the entrepreneur is eligible for a business credit or a business loan. Upon approval, the amount will be made available to the entrepreneur within a specific time.