You’ve just received an offer to buy your store at an attractive price. You would be able to sell up to 1000 pieces with a solid profit, but you only have the cash on your account to buy 200 pieces. You know that such occasions do not last forever – the goods will disappear from the supplier’s warehouse in a few days. Therefore, do you have to say goodbye to the prospect of making money on the other eight hundred? Not necessarily.
In this situation, the solution may be a loan, but you must first choose wisely and … get. How to make it happen – when the opportunity arises? Below are five tips to help you avoid any problems. In some cases, you will achieve the best results if you take care of preparation in advance.
Before taking out a loan for a company, take care of creditworthiness
If you apply for a loan at a bank, you have your credit check at Credit Checker … well, like at a bank. However, not only banks cooperate with Credit Checker, but it is also done by many other companies and institutions granting loans, and the assessment of data collected by the Credit Information Bureau directly translates into the cost of credit. That is why it is worth taking care of this aspect of our business.
The Credit Information Bureau collects data on the amount of your liabilities, whether you pay it back on time and whether you have – or did not have – arrears. You will not change the history as such, but you can take care of what will appear in Credit Checker from now on.
Of course, timely payment of obligations is key here, but you should also think about the less obvious. Is there a whole range of credit cards in your wallet that you never use? Eliminate them. Each of them is a potential debt that you can incur at any time, so lenders can be wary of them.
Similarly, the case is with a credit line or a popular “debit” – do you really need to be able to take a loan in the account in the same amount as it is now? Maybe it is worth reducing it? (Remember that “debit” is usually one of the more expensive loans you can get in a bank).
Prepare a transparent, reliable business plan
The larger the project you intend to implement, the more useful it will be a reliable, detailed and, above all, realistic business plan. A business plan, regardless of whether it is a fat document or a simple statement of revenues and costs on a sheet of paper, is needed above all for you.
After all, you are the most interested in the fact that the sales margin covers your costs And credit costs. It is also you who are interested in the fact that the proceeds from sales appear in such a time that there will be no problems with paying off the loan.
If you apply for a bank loan, a written business plan is practically the only source of information for this institution about the prospects for your venture. That is why you will probably be asked to prepare it, regardless of whether it will be an investment for many months or a bargain purchase of 800 items at an attractive price.
And probably a card with simple calculations is not enough: you will have to fill in dozens of fields in a specially prepared bank form.
It is different in Good Credit. The bank needs a business plan to assess the chance that your venture will succeed and you will repay the loan. We don’t need to look into your plans because we can see the history of your business and this testifies for you. We know that if you have done well so far, you will also succeed this time.
Ask for advice before making your choice – ask friends about your experience with the company. Find out what to look for. Also look for reviews on the web, especially those unfavorable.
Check if they relate to issues that are important to you, and if so, verify that they actually find confirmation in the offer of the institution – Internet users can, for example, pay attention to the cumbersome procedure, unfavorable provisions of the contract or hidden costs.
Similarly, check positive reviews too: look for items that are relevant to you. However, do not trust uncritically the opinions of people you do not know, because not all of them are reliable and not all are expressed selflessly.
Check the costs (UNDERSTAND WHAT THE APRICATION IS!)
Since we have already mentioned the costs: check them carefully.
Find information about the APRC (Actual Annual Interest Rate) and actually do not take into account those offers in which the APRC was not given or is abnormally higher than the competition’s offer.
Compare the obvious costs, i.e. interest, commission, and possible insurance, but also check the less obvious ones – may be the offer presented requires opening a bank account? Maybe “in the package”, which of course you can not opt-out, you will get additional services with catchy names, but zero usefulness and far from zero price?
It may turn out that under the guise of attractive interest there are additional costs that ultimately change the seemingly cheap offer into one of the more expensive ones.
Examine the offers carefully
Do not stop with marketing slogans or the seller’s assurances. If you hear “interest rate: zero”, you can almost be sure that a solid commission or expensive insurance awaits you. If you hear “low installment”, make sure the loan period is not long. The low installment looks encouraging, but maybe it is worth paying twice the installment three times shorter?
Finally, read what loan companies and banks do not want to speak out loud – the small print. The devil really is in the details, and it’s all about your money.