Tips On Business Loan Application

Tips On Business Loan Application
What is the most important advice for applicants seeking to attract investment? Change the focus of your attention.

When preparing your investment project, do not think about attracting an investor, but about how to bring your project to a state acceptable to the investor. By focusing on finding an investor, you will follow the wrong path, which will lead you in the opposite direction, when investors and consultants will not pay attention to your project. Focusing solely on making your project attractive to investors will automatically solve the problem of attracting investors.

Define Your Place

If you are thinking about attracting investments, you first need to determine the type of investor that suits your interests. To do so, you need to clearly understand the differences between a financial and strategic investor, a private and institutional investor and analyze your goals and financial capabilities. Do you have liquid collateral to qualify for a loan? What unique assets do you have so that a strategic investor would want to form an alliance with you? Will you be able to sustain a long marathon with an institutional overseas investor?

Match the requirements usually imposed by investors with your goals and opportunities and determine which type of investment is most preferable for you. Only then do you start looking for an investor. When you meet an investor in your path, find out if you really have the type of investor you need. If this is not your type, do not waste your time on him.

The very first mistake of applicants is that they do not understand what type of investor is best suited for the development of their business. In most cases, when you start looking for an investment, applicants do not even think about it. This has a negative impact on the process of communication with the investor, which they mistakenly endow with qualities that are not characteristic of them - for example, financial investors are endowed with qualities of strategic investors by job seekers.

Prepare An Answer To A Specific Question

A business plan will be required in almost any way. The key point must be the financial component. It is extremely important to substantiate the profitability of the company as clearly as possible, to be more precise, to give an answer to the question: when and from what funds do you expect to repay the loan? If you do not know it yourself, you do not even have to try: they will not give you a loan anyway.

Get Dressed Strictly

It is very important to look appropriate: investors have their own idea of the appearance of a trustworthy entrepreneur, and it is better to match him. The so-called "visual assessment of the borrower", the results of which are taken into account in calculating the level of credit risk, is carried out every time. You should not show your tattoos to credit department employees, even if they are highly artistic.

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If you see that the proposed investment is in line with your objectives, then start a dialogue. Remember that investors work exclusively according to their own rules and procedures, following the approved investment strategy. It is foolish to teach others how to spend their money. It is useless to try to change the rules of the game that have developed in the investment business over many years. The best thing you can do is to understand these rules and achieve your goals within their framework. If you suddenly see that the proposed principles do not suit you for any reason, then just give up the idea of attracting investment. Develop the business on your own.
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