Small business loans are currently approved 18.8% of the time at large banks and 51.6% of the time at smaller lending institutions. This means that wherever you apply for a small business loan, you will have to have decent credit history and a solid business plan to get approved. While your credit history is difficult to change quickly, there are a few things you can do to make your business plan more attractive to lenders.
Take a Strategic Management Course
Rather than a general business course or even a finance course, you should look for a strategic management course at your local college or online. These courses tend to focus on risk analysis and the various strategies that companies can use to mitigate risk. Often, they also focus on setting short-term and long-term goals. Although most strategic management courses utilize large scale business models for their discussions, the principles you learn will be applicable to your small business as well.
While you are taking your course, ask if you can substitute your own company's business plan for one of your assignments. You may get some notes from your professor or ideas from your classmates that will improve the strength of your business plan.
Focus on Risk Analysis and Your Budget
Business plans include everything from your long term goals to concrete steps that you will take to meet them. While this is great for your business, it can end up being a long document that lenders do not want to spend an hour examining. You should consider writing a separate business plan specifically for your loan. In this version of your plan, give a small summary of your basic operations and goals. Instead, focus on your risk analysis and line-item budget.
Lenders need to determine how risky it is to lend to you. If you have a robust list of possible risks and ways you intend to mitigate those risks, it is more likely that your lender will feel comfortable approving you.
Hire a Professional Writer to Edit Your Plan
Although hiring a business strategist to write your business plan would likely increase the value of your business plan, it can be too costly for many business owners. However, if you feel uncomfortable with your writing skills, you should definitely hire a professional writer to edit and format your document before you bring it to the bank. You should look for a writer with plenty of samples and experience in composing business documents.
With a solid business plan, you can confidently approach lenders. However, keep in mind that you may need to apply at multiple institutions before you are approved for the business loan you need.Share