If you want to raise capital from banks or lenders for your small business, it would be wise to know the things you should avoid doing (to get the results you want). Attempting to navigate the small business financing industry on your own with no guidance will prove to be a daunting and confusing task. If you have any plans on applying for a small business loan, there are certain things that you should not do on your own, rather consult with an expert. Below I provide you with a list of four things you should not do on your own if you plan on applying for a small business loan. Doing these four things improperly will hurt your chances of being able to obtain the financing you need to grow your small business.
- Develop Your Business Plan – Some lenders will require you to submit a full business plan (with marketing plan and financial projections) along with your loan application. Developing a well-thought out and well-researched business plan is critical to having lenders take you and your business endeavors seriously and for them to consider you for approval. Working with an expert who has experience helping small business owners develop their business plan to apply for financing is critical if you want to get your loan approved. Doing it on your own runs you the risk of leaving something out that an expert would have otherwise known to include. I have written over 100+ business plans that have been approved for an upwards of $50k+ so I know what lenders are looking for. Most of the business plan I’ve seen that were written without expert help were lacking critical information that lenders want to know. Don’t be the person to leave something out, seek expert help to be sure you’ve got it done right.
- Register Your Business & Obtain a Tax ID – Consulting with a legal expert to register your business is critical. When I started my first business, I used a service company to register my business. It turned out to be a big mistake because they forgot to file my business as an S-Corp at the Federal level and when I tried to file my corporate taxes as an S-Corp, I wasn’t allowed. The time to file as an S-Corp had already passed. To avoid situations like this, consult with a business lawyer who specializes in registering new businesses.
- File Your Own Business Taxes – Filing taxes is very important as a small business owner because there are plethora of things that you can legally write-off to lower your tax bill. It’s wise to keep a Legal CPA on your payroll at all times as a small business owner so you always file your taxes accurately (so you can get the most savings) and on time (so you can avoid late fees and penalties). Attempting to file your own business taxes could results in errors that potentially increase your tax bill.
- Apply for a Small Business Loan – And finally, if you plan on applying for a small business loan, I suggest that you seek expert help from a financial advisor or loan broker. Financial advisors and loan brokers often have built relationships with a network of banks and lenders (both traditional and alternatives). They have access to funding sources and information on various programs that you may not be privy too. It’s always wise to seek the help of an expert before you commit to completing any type of financial transaction, including applying for small business loans. Experts like the advisors at LenCred will work with you to determine the best type of funding for you based on your unique situation and help you get that funding. They will also guide you to the best lenders that offer the best rates and the lenders that are lending to people like you. Seeking expert help to apply for a small business loan will save you time and money.