Well, whether you a start-up, store owner, entrepreneur or planning to be one; let me warn you, the life ahead is no longer that rosy it seems from outside. No one ever tells you the truth about the future, one has to go out explore for himself. Small business owners are regularly confronted with various threats to the very purpose of their existence and moreover difficulties faced in securing finance.
Getting finance is a cumbersome task for majority of small businesses despite the government and industry backing. Though the options are available for them but still businesses are rejected for small business loans. There is a constant struggle between banks & small businesses.
The various researches point out that despite the positive economic landscape, still small businesses find it tough to reduce their operating costs and foresee exigencies. All this leads to lack of growth and cash flow crunch for the businesses. But when they apply for small business loan; they are denied. This creates a vicious cycle of slowdown; they start downsizing both manpower and operations, pool in individual funds and increase the risks associated.
But the basic question is, why they are rejected? A bank provides loan based on the business’s credit score and majority of small business owners are unaware of their ratings, leave alone interpretation of the credit score. Their indifference to creditworthiness leads to long term damage to their business, when they pool in individual funds to manage the short term credit crunches. The industry associations have developed systematic mechanisms to generate business credit scores for the small businesses; banks use it to evaluate your loan applications.
The score includes the historical payment cycle of the small business loans availed and the personal capacity of the owners while determining the current scores. It is an ongoing process to build your credit score and timely payments to suppliers help build your score strong.
Once the small business owner is able to anticipate his credit worthiness, he is better positioned to succeed. If you know your scores well, you can project your growth rate better and chances of being rejected get nullified. Moreover the small business loan application process becomes smooth and fast.
Once the small business owner is able to anticipate his credit worthiness, he is better positioned to succeed. If you know your scores well, you can project your growth rate better and chances of being rejected get nullified. Moreover the small business loan application process becomes smooth and fast.
You need to take charge of the situation, understand the market mechanism, create synergy and easily get your small business loan approved. And with your small business loan, not only your business grows but the whole economy thrives.
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