5 Things You Need to Know Before You Look for Small Business Funding

1. What’s Your Personal Credit Score

Your personal credit score is a key factor in determining whether a bank or alternative funder will consider your application for capital, and what you’ll pay in interest on the funds you receive.

You must know your personal credit score before you apply, and have a sense of whether that number is good or bad for your prospects.

For more visit: http://www.smarthustle.com/small-business-funding/

2. Are you ready, and able, to put up Collateral?

Funding falls into two broad categories, secured and unsecured.

For a secured loan, you will be asked to put up collateral, an assetthat will become the property of your funder if you fail to repayyour funding. Pledging collateral can help you get a lower interestrate than you’d get for a loan that is not secured by collateral. Onthe minus side, it may make you nervous to put up yourequipment, or even your home to get that lower rate.

In unsecured funding, a business owner no longer needs to riskher home to grow her business.

Bank loans typically require collateral, while many forms ofalternative funding need not be secured by collateral.

For more visit: http://www.smarthustle.com/small-business-funding/

3. Do the people who interact with your business on Social Media love it?

If it seems strange to pay attention to your social mediastatus when you are applying for funding, you should knowthat many of the underwriters who will be considering yourrequest will be checking social media to see whether doingbusiness with you will be a bad risk.

Like credit and collateral, character is one of the fivetraditional “Cs” of lending.

For more visit: http://www.smarthustle.com/small-business-funding/

4. How much, and what types of, documentation you’ll need when applying.

Whether you seek traditional or alternative funding, youwill be required to provide a lot of information on yourbusiness.

An established business will need to show at least threemonths of banking statements, while a newer business ora company whose business rises and falls at differenttimes of the year could be required to show a full 12months of statements.

For more visit: http://www.smarthustle.com/small-business-funding/

5. How will you pay back the funding?

Before you seek funding you must think about how you aregoing to repay the money you receive.

Do your income statements give you confidence that youwill have enough money coming in to pay back principaland interest? Can you show a funder that, if you borrowfor a new piece of equipment, you’ll be able to do morebusiness and generate the cash to repay the loan?

You also need to learn how your funder will requirerepayment.

For more visit: http://www.smarthustle.com/small-business-funding/