Starting a business of your own can be very rewarding. However, it’s also daunting. Keep in mind that a rewarding business is often an outcome of taking high risks.
Most start-up businesses fail within five years of inception.
That’s not our creation, Michael Gerber, the renowned business coach and author of The E-Myth Revisited, did a study and found out that 40 percent of new businesses falter within their first year. The chances of survival grow slimmer as the years go by, a further 80 percent close shop within five years.
Therefore, it makes sense to purchase a running and proven business. Smart entrepreneurs know that it reduces a significant risk, and it creates the opportunity to make an incredible profit.
But, what if you don’t have to have a mammoth capital or an enormous stash of savings?
You finance the venture through buying business loans, and with the help of reputed professional financial consultants from Brisbane Finance Guru, your application will match the best.
Here’s how smart entrepreneurs make applications and get approvals on business buying loans
To start with, lenders will request for the primary financials of the firm. They will seek to find out the business’ profitability, analyze their cash flows, growth potential, and sales forecasts. A business with a healthy cash flow and promising growth pattern defined by sales forecasts will make the deal worthwhile for a lender.
By advancing buying business loans, lenders are ready to partake in all the risks of the business. It is a partnership. Therefore, lenders will also seek to see your level of commitment to the venture.
Ensure you have sufficient equity in the businesses acquired through investing your own money and provide adequate security for the loan using alternative assets.
Bankers make decisions on applications for buying business loans primarily by the financials. They use this information to weigh the risks against the prospects and your ability to service the loan.
Therefore, be ready to give elaborate financial information. This should include personal financial facts.
Withholding material financial information will only lead to an overly long process or a declined facility.
Many enterprises fail because of lack of sufficient money to sustain the business. Undercapitalizing can be particularly frustrating especially when you are cash-strapped and unable to access credit just when the project is about to bud.
Make sure that your buying business loan application has a comprehensive business plan that has an appropriate contingency plan and you borrow enough capital.
On the other hand over borrowing could leave you with very high monthly repayments that are unsustainable and eventually drive you out of business.
Make sure that you borrow the right amount using our loan calculator and balance the business needs with your ability to repay comfortably.
Inadequate and incorrect documentation is a classic rookie error that frustrates entrepreneurs from accessing buying business loans. Different lenders request for various documents, and you need to pay keen attention to their requests.
Here’s a list of the most common documentation requested for business buying loans
Finding the most appropriate lending solution for your acquisition or expansion needs requires meticulous review of your needs and their costs, realistic expectations of the business and honest evaluation of your repayment capacity. Brisbane Finance Guru can add value to this process by providing sound financial advice, comparison of the terms and interest rates of different lender’s buying business loans and guidance on the application process.