A business loan can be the right tool to grow a business or allow it to continue operating. However, there are certain internal issues that you should make sure is the best decision before making it.
If you analyze the conditions of your business before applying for a loan, on the one hand you will get to know if you can really be a candidate and on the other, you will know how much you could make the most of financing.
Is your credit history positive?
One of the main requirements that financial institutions request to be able to grant a business credit is to have a good credit history. When you show a positive behavior in the use of credits, you are more likely that the institution is willing to lend you. And not only that, but to offer good conditions such as large amounts and low interest rates.
The recommendation is that you check your score in “Credit Bureau” and if necessary, improve the way you manage your resources, manage one credit at a time and use it only for what is essential.
Tip: Your score improves every time you pay on the indicated dates and depositing more than
Does the business comply with legal guidelines?
Your business must also be complying with the standards that the State establishes. Such as being registered in the Tax Administration System, since financial institutions need to prove your business activity.
In addition, you can show your billing level as proof of income and that the credit process proceeds. For example, some financial companies calculate the amount and term that they can grant depending on the amount you invoice to ensure that you will really be able to pay the loan and that this is a tool beyond just getting into debt.
Tip: Formalizing your company can also help you get better business opportunities.
Have you achieved considerable growth?
Another indicator that will let you know if your business is ready is if you have managed to grow considerably. Well, even if you need this credit to continue developing your projects, the viability of your business model is important. You need to evaluate how long you can maintain that growth and thus determine on your own the risk of obtaining this new debt. It is important that in your projections
financial include the respective balances to the payment of the credit.
Tip: You can make use of the credit simulators that various institutions make available to you on their platforms.
Do you have a specific plan to use credit?
When you have already planned a use for credit, institutions usually consider this factor as an indicator that you could be a good customer. But especially for your business, this plan will serve as a guide to put it to proper use and make the most of capital.
Consider that the purpose of this type of loan is to achieve strategic objectives that generate true growth and boost your company. For example, automate processes with technology, accelerate sales with a new value offer, innovate your product, expand to the north of the country, among others.
If your answers to these 4 simple questions were positive, rest assured that your business is ready to apply for business credit and make the most of it.