In the current climate, it is becoming increasingly difficult for entrepreneurs to obtain external financing. As a self-employed person, chances are that sooner or later you will turn to a bank with a credit application and of course you hope that it will still be assessed positively. What can you do to increase your chances of a loan?
First of all, when applying for a credit, the following applies: a good start is half the battle. Make sure you have your request clearly and clearly on paper. What could be the objections raised by the lender? Try to think carefully about this in advance, so that you have an answer. It is wise to ask for help from an expert. Your administration office or your accountant can assist you with the preparation and your presentation. Make sure that you are aware of the market and that you understand what your chances are.
Give a detailed description about what you want to finance with the loan and how you can pay off the amount. What are your plans? Do you have equity, and how does that relate to the amount of credit you request? Most banks will expect that your equity represents at least three times as much as the requested amount.
Make your application look professional and make a nice presentation of your plans. You must provide extensive information on matters that the bank is interested in. Appraisal reports, an overview of the order portfolio and the debtor portfolio, an inventory overview and the financial statements are relevant documents.
In addition to good preparation and a clear presentation, it is important that you convince the bank that you are a suitable candidate for a loan.
You can only make a first impression once and it is important that you look professional. Make sure your administration is in order. Show that you have sufficient knowledge of the market and that you are aware of current developments. Show your vision for the future and a realistic view of the progress of your company’s financial situation.
You have submitted your credit application to the bank’s adviser. He will then prepare a credit proposal and pass it on to the department that assesses the credits. When the application is approved you will be notified and a credit offer will be prepared. After signing and checking the credit agreement you can dispose of the loan amount.
Although you take the correct matters into account, it is possible that the bank considers the risk too high and decides not to grant you a loan. Fortunately, this does not automatically mean for you as an entrepreneur that you do not receive external financing. It is still possible to see if you can find investors for your company. You can also submit your application to other credit institutions. Nowadays, private individuals, the government or online lenders offer numerous possibilities that might help you further.
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