EXPOSED! How to apply for a small business loan from your bank and get it approved!
[ Understanding Different Types of Small Business Loans] 3. Know where the money will go. Are you purchasing real estate or buying a truck? Perhaps you simply need the capital to make an acquisition. No matter the purpose, have a firm idea of why you need the money and how you’ll use it, Singer advised. Be able to clearly present the use of your funds and the specifics of how the money will be used. Lenders have different requirements for the use of proceeds, so be sure to ask your lender before you get started. 4. Demonstrate sufficient cash flow. If you’re an existing business, banks want to see that you have demonstrated cash flow sufficient to make your monthly loan payments, Singer said. They’ll do this analysis by looking at your past tax returns and existing debt.
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Overdrafts are usually short term and last for about six months to one year before they are renewed. As a result, they should only be used as working capital for business activities that are short term in nature such as paying staff salaries or purchasing goods to be supplied to a customer. One of the benefits of a bank overdraft is its flexibility. You only pay interest on the amount of the overdraft you use; if you dont use it, no interest is paid (except for some bank charges that may apply). However, its disadvantage is that it is only available to solve short term capital needs. Never use a bank overdraft to purchase equipment or lease a property which has a longer term than the overdraft itself.
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