Almost all businesses worth the name need finances to start and to grow but everybody doesn’t have the required funds available from own sources. It is very much the need of any business that a start-up capital is required and most of the times a part of it have to be financed by the grants or the loans. Since the grants are available for very specific kinds of businesses which are directly or indirectly related to the benefit of the people at large, the only option left is to look for loans from the banks or the financial institutions. There are many factors which are considered by any lender before the grant of the loan to an enterprise or an individual.
Every bank or financial institution would not lend
Banks and financial institutions are in the lending business but many a time it has been observed that they prefer lending to certain types of businesses and not to just any business. Hence, you need to explore the institution which would lend to your kind of business.
Investment of the owners
It is a thumb rule that 100% financing is never available from any lender to any business, howsoever unique the idea may be or whatever be the projected or present income from the commercial venture. The owners need to put in their own investment as a part of the overall cost. The percentage of the finance by the institution would vary with projects, more the risk involved in the business lesser the percentage of finance by the lender.
Presentation to the lender
It is another very important aspect while planning to get the finance for the business. The financial institution would expect you to make a proper presentation with facts and figures regarding the utility of funds to be provided by them. This should include the realistic figures about the size of the market available for the purposed business, how and what share one expect to grab out of it, the strengths and weaknesses of self and the competitors already present in the market and so on. This would assure the lender that you understand the ins and outs of the particular business.
Have a professional advisor on your side
The professional mortgage brokers are a good help at hand when it comes to applying for a commercial loan. Because of their experience gathered over the years and thorough knowledge of the subject, they can guide the prospective borrower on many aspects which a first timer may not know about very well.
Credit Score and credit history of borrower
This is again one of the very important factors at which any bank or financial institution would look at before lending to any individual or an enterprise. Having a good credit rating at present and a good track record of repayment of any earlier loans taken, would go a long way in getting a commercial finance at competitive rates whereas the reverse would create many hurdles and loans would be available if at all, at high rates.
