How to finance your small business immediately

It is said that small businesses have problems with cash and it is true. However, there are ways by which these financial problems can be sidestepped. There will come a time when you’d like to make some expansions or have a deal that you’d need money immediately to execute. The secret is that there is no magic pot that you can collect the money from. The only way out is preparing before the time comes.

I want to focus on seeking financial assistance from institutions that support SMEs.

These days there are companies that give loans within 24hrs (for government workers) and some offers assistance within 48hrs.  I must caution  you that it is not good to take loan for a business that is less than six months, you don’t begin a business with loan. 

Some people fear loans but like we always say ‘if you fear you can’t eat’. Most businesses that have become big did it with the help of OPM (other people’s money). They’d not tell you but aside taking loans some of the wholesalers and retailers take their products on credit basis. If you collect money from somebody and you pay accordingly you’d have no problem.

The secret to being eligible for finances is by creating a good financial history. They want to know if you actually make money in your business; how much you make every month. This kind of information would make them know whether if they give you money you can pay it back with interest and on time.

1.       Company registration; first you company should be registered with the registry general. It tells them that your business is viable and not against the law. However, some financial institutions don’t mind if you haven’t registered.

2.       You need a bank account; this would help you by making available your bank statement. It is wise that you put in as much money as you redraw. They have to see that money comes into your hands frequently.

3.       Business plan; before you take any substantial money from these companies they want to know your future plans and how you plan in achieving them.

4.       Sales ledger, receipt books; they’d like to review your sales book. While some use your bank statements, others too might like to go into your sales book, they can work out of it how much you earn every month and so on. 

5.       Collateral; this is a security for the bank. It could be a land, house or car. Some banks might also not request for collateral, as usual it depends on how much you are taking and the bank’s loan policy.

6.       Guarantor; somebody would stand in for you so that if you don’t pay they’d take it from that person. Some savings and loans companies require this.

Some banks might not require all the above but the truth is that if you’d take a very huge amount they’d require all of the above and more.

Another financial alternative is loans from friends and relatives. Please, pay them as per the agreement so that next time when you need money again they’d be prepared to help you. Moreover, if you don’t pay and they whisper a word it’d get to the ears of about twenty four people and it’d create problems for.

When you start you business afresh, it is good to put all these in place because you don’t know when you’d need money. If you have these in place then you’d have money immediately when you need one.