The ability to access affordable finance is an option most businesses will need at one time or another, whether it’s to fund the purchase of new stock, or to invest in assets that’ll help the business grow. You’ve probably considered how access to finance could improve your business, but are deterred by how difficult you think it will be to apply for a business loan.
There’s no reason to fear the banks
Bank managers of times gone by had a fearful reputation that put many business owners off ever applying for a loan, but it’s just not like that any more. The banks actually want to lend to you, so it’s up to you to present a convincing case.
The banks might know a lot about money, they won’t know about your business, so take them back to the start and demonstrate very clearly how the loan will help your business grow. In this case, sometimes less is more. Rather than taking the bank manager on a guided tour of your most complicated spreadsheets, only provide them with the information that’s relevant to their decision.
So what will you need?
When you apply for a business loan there are a few essentials you’re definitely going to need. This includes:
- Up-to-date financial statements
- A business plan to show the direction your business is taking, and how the loan will help you get there.
- Tax returns to verify your income
- Details of company bank accounts
This might sound like a lot of work, but the reality is that you’ll have all of these documents already, with the possible exception of the business plan. And creating a business plan is actually a lot less daunting than you might think.
Real-time accounting makes the process easy
If you’re one of the many business owners who have already made the move to real-time accounting, you’ll find the process is even easier still. Rather than lugging along all of the above documents, all you’ll need is a laptop or tablet to access real-time financial information and paint an accurate picture of your business’s financial health.
This will include:
- Income and expense reports
- Growth trends
- Sales forecasts
The added confidence the bank manager will have that the information is accurate and up-to-date will also help your case.
A picture paints a thousand words
Taking the time to create charts and graphs that illustrate your business’s performance and future plans is well worth the effort. If you are already using forecasting and reporting software such as Crunchboards,then this can be done by simply lifting graphs and charts from your online business dashboard.
How can we help?
Prosper provides a comprehensive approach to accountancy, tax & business growth services for start-ups, SMEs and growing companies across the UK. We are your bookkeeper, accountant and finance director all rolled into one. Check out letsprosper.co.uk to learn more about how we can help your business.