Securing funding for a small business requires understanding what lenders prioritize. They assess character, capacity, capital, and collateral. Character involves evaluating personal and business credit histories. Capacity defines whether the business can afford repayments based on income and expenses. Capital shows the owner's investment commitment. Collateral relates to secured loans requiring assets or personal guarantees. A strong application includes a clear business plan and precise financial records, ensuring the lender feels informed about the borrower's reliability and business strategy.
Lenders want a clear sense of your business and how you handle money, focusing on character, capacity, capital, and collateral.
It’s essential to have a clear business plan explaining who you are, what the business does, and how the loan will be used.
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