February 19, 2019 | Mason Roberts
Many times, businesses need financial help to be as successful as their owners have initially envisioned. But to receive business funding can seem like a bit of a challenge. If you are open to working through the obstacles that may appear, a business fund could help your business flourish like nothing else would. Imagine having the capital you need to create your dream business. It sounds great, right?
In order to receive business funding, you must first apply for one. Now, not everyone receives business funding easily, turning to other options with more of a risk factor. There are some common traits that approved business applicants have in common, which may help you decide if this is the best option. Here are the top traits that funders look at for the best business applicants.
How Can a Business Fund Fix My Funding Problems?
Whatever state your business is in, whether it's a startup, a business that has been open for some years with average cash flow, or a business that's tanking and just needs desperate help,business funding can help you in many different ways. For starters, it's true a potentially large lump sum of money is bound to help in some way, shape, or form.
One idea can be to update your inventory. This will help your business function better with new items.
Another excellent idea could be to hire more employees if necessary. Listen to the existing employees, and make note of how your business is functioning already with the staff you have. If you decide that you need a little more help, a business fund can make it possible to hire some more support, ensuring a better functioning workplace.
You could also expand your business to a location that is bound to bring in more foot traffic and, ultimately, more customers. With this, you could bring in more money than before and you could even compare and contrast to see how your business functions in different locations.
Lastly, you could purchase new equipment. This will take your business to the next level with shiny new items, catching the eye of some new customers and bringing in additional revenue.
What Are Funders Looking at In My Application?
Now that we've gone over some of what you can do with business funding, what are the best traits to have for your business fund application? In a business fund application, funders tend to look at a few key factors to see if you are eligible for such funding. When your application is being evaluated, a funder tries to make sure that they won't lose money, and that the borrower makes all the payment dates in a timely manner (plus whatever rate is tied into the cost). With all of this considered, a funder needs to make sure borrowers can really be trusted, to put it simply. Here are the top factors that funders consider when they're looking for the best business applicants:
Your Business Capital
With the money coming in from your business, funders will decide if you are the best applicant to be considered for additional funding. If you have a steady capital coming in, chances are that you will be approved. If not, your chances decrease dramatically. Obviously, there are more factors that contribute to the decision process, but this is an important one. In proving you have a steady cash flow, you must have bank receipts to prove you are able to pay back the funding you'll receive. With this information, they'll decide how confident they are that you'll be able to pay back your debt to them.
How Long You've Been in Business
The longer you've been in business, the more proof you will have that you are a good candidate for a potential funder. Your records will show them whether or not you handle your money responsibly, which is an important trait to have when it comes to being considered for funding. The longer you have been in business, the more revenue and credit history you have to show in your favor.
Your Financial Plan
Many times, funders will ask you what you have planned for the money you could potentially receive. That means you want to make sure you have a good answer for them. Whether it's meant for rebuilding, upgrading, or payroll, make sure you have an answer that will help them understand what direction your business is going in. So let's break it all down.
Best Business Funding Applicant Traits?
- They come prepared. Business owners who have been approved for funding are always prepared and ready for anything thrown at them. When applying for a small business fund, you should bring some information with you to help the process move smoothly. Even if you're missing some pieces, it will still put you ahead of those applicants who did not effectively plan ahead.
- They are responsible people. This is a desirable trait that should be easy to understand. Funders look for borrowers who are responsible overall because there are a lot of qualifications to make sure you reach. Being responsible with your money, credit score, and organization skills are your best bet. All of your statistics will speak for themselves. A good credit score alone will show that you are responsible enough to pay back your bills. A funder can then safely assume you’d be able to meet payback dates, as well.
- They plan ahead for their funding. As the responsible and prepared person a business funding applicant should be, you should have a plan in place. Creating a plan for your funds once received will help you destress the situation. Having a plan set up before you even apply is also a great idea. Plan the process of applying and what funder you will go to ahead of time.
Make Sure You Are A Good Candidate For A Business Funding Applicant
Knowing some of the qualities that approved small business funding applicants have in common should help you land the funding you need. It should also help you understand what is expected of a high-quality applicant, and how you can further your chances in receiving the funds you need to flourish.
Now, when you decide you are in need of business funding, whether it is to help your struggling business or make your business even more successful than ever before, you will know what is expected of you and how to get there. Hopefully, after reading this article, you realize that it isn't quite as hard as it seems. Remember, being confident and prepared in all the right ways is a great way to ensure an outstanding business funding approval. Use this information on what traits make the best business applicants to boost your chances today, and best of luck on you journey toward small business funding!
