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Important Ideas And Great Options To Get Money For Your Business

The first step to trying to get money for business is to have a sound business plan. Your business plan is your calling card to the bank or financial institution that not only explains to them why you need the loan, but what you plan on using it for and how you will expect to repay.

UNDERSTAND A BANKER’S MENTALITY

You have to consider that if you are going to a bank for a loan, in effect, you are trying to sell your plan to the bank. As in all good sales calls, you have to understand your customer’s needs in order to be successful Understanding the bank means knowing that they need to loan money at profitable interest rates in order to make money. Yet, they need to be conservative and try to avoid risk when they lend. With small businesses that is a balancing act, because they know that there is a high rate of failure for small businesses.

WHAT HELPS A BANKER APPROVE A LOAN ?

The ideal situation for a bank would be to lend money to an existing business which has been in business over a year, and which shows profitable cash flow that can easily repay the loan. Yet, in such a case, the business probably won’t need a loan.

More likely loan cases, are a new business owner who has a successful track record of owning and running a similar business. Someone who ran a hardware tool supply business and now is opening up a new one. The next best loan applicant for a bank would be the former successful business owner, who is now interested in running a complementary business, or worked for years in a business and now wants to open up on his own.

In all those cases, the banker is most likely to approve the loan or offer you a small business line of credit when a small business owner has some financial reserves and personal collateral sufficient to solve the unexpected problems and fluctuations that affect all businesses.

WHAT FINANCIAL REPORTING DO YOU NEED ?

In all cases you will need a full accounting of how you will be using the money and how you expect your sales and cash flow will allow for a reasonable repayment of the loan. In such cases, take the perspective of the banker and imagine you are the one lending the money. Would your proposal make sense in such a case? Do you think that the business will be able to generate the amount of sales and profits necessary to repay the loan ? Is the money being used wisely?

THINGS TO KNOW BEFORE YOU APPLY FOR A SMALL BUSINESS LOAN

Invest your own money. Investing some of your own money in your small business is another way to improve your chances of getting a loan. Lenders typically like to see that owners have at least a 25 percent equity stake in the businesses they finance.

Check out your credit report. Lenders use your personal credit history to help them decide whether you’re a good risk for a loan, so it pays to know what they’ll find. If your report shows a mistake, contact the credit reporting agency and demand a correction. If your credit report shows legitimate late payments or bankruptcies, you should include a letter with your application explaining the circumstances and how they’ve changed.

Ask your local banks. Smaller community banks might be more inclined to finance businesses in their areas, and their loan officers are more likely to give you individual attention.

Real estate loans – if you want to purchase offices or warehouse that your business will be using, there are many reasonable and easy to apply options for real estate financing.

SIMPLE and QUICK ALTERNATIVES TO BANKS

There are some financial institutions that can give you a quick turnaround on getting a cash advance for your business. If you have an existing business, and use credit card processing, you can get cash within 48 hours. If you are in need of leasing new equipment for your business or professional office you can find an easy way to get leasing financing [http://www.successful-small-business.com/equipment_leasing_broker.html].

Naming a Small Business

Naming your business seems like an easy task but don’t take this decision lightly, you will be living with this name for many years to come and believe it or not a business name can make or break a business.

Naming a business is the first and most critical piece of marketing for your new business. A well chosen name can aid marketing efforts by communicating the business purpose, creating a good image, and forming the first emotional connection with customers. A strong business name will help build a strong brand that customers recognize and trust.

The name of your business must reflect the structure under which you will operate your new business – you will need to determine if you want to operate the business as a sole proprietorship, partnership, limited liability company or corporation. You can find the implications of each structure by visiting the website of you local small business administration office.

A good place to start the naming process is by writing down the answers to the following questions:

1) How would you describe your target audience?

2) What problems will you business solve for this audience?

3) What are 5 benefits that your business will offer to your customers?

4) What are the names of 4 competitors in your local area?

5) What characteristics will differentiate your business from these competitors?

Use these prompts to put together a list of 4-5 potential business names. Make combinations of words that you listed for characteristics, benefits, problems etc but avoid making the name too long as a shorter name of 2-4 words will be more easily remembered by customers.

Next test the names you have against the following criteria for a winning business name:

1) Is the name meaningful? Does it communicate the services provided by your business?

2) Is it easy to understand and pronounce? Easy pronunciation is important as you will want people to be able to easily pass on your business information to other via word of mouth.

3) Can the name grow with your business? It’s important that your name isn’t restricted to a certain city or location – if in the future you choose to franchise or expand you will want to retain your existing business name.

4) Will the name work in print? Experiment with different fonts and logos with the business name to make sure you are happy with the way it will be written.

5) Does it spark interest and express a desirable image?

6) Is it authentic to you and your vision for the business?

Once your new business name has passed these tests the next step is to ensure that the name is not being used by another business. You will want to ensure that your name is unique and avoid infringment on the trademarks and rights of other businesses.

The first place to check if any trademarked names are similar is at the US patent and trademark office. At their website you can search the database to check if you name has been registered by another business. Make sure there isn’t a very similar or identical name in use by another business.

Another place to check is on the internet. Many businesses will register a domain name that is the same as their business name. Using a search engine such as Yahoo.com or Google.com check that there are not any businesses that have websites with similar names or that you can find any businesses with similar names.

Finally take a look at your local yellow pages to make sure that there are no local businesses operating under similar names that have not registered trademarks or are not listed on the internet.

After you have finished these checks you can be confident that you can use your new name without problems.

A good final test of the name is to run it by family and friends and solicit their comments. Ask them how they feel about the name and if the name gives them a clear description of the services that you will be providing in your new business.

Once you are happy with the name you are ready to start preparing marketing materials such as business cards, fliers, and brochures. Look out for my next article on marketing for small business at my blog – Working with Pets.