Part of our series on Small Business Tips For Success
Small business owners who need money to help grow their companies should make sure they put their best financial foot forward before reaching out to a bank or other lending organization.
Here are five good ways small businesses and new entrepreneurs can improve their chances of getting the financing they need:
1. Maximize profitability in most recent tax return – delay realization of expenses into next year if it helps create a more profitable presentation. Tax returns carry more weight than company-generated financials in the eyes of lenderss. If you had a good year, file your tax return early to make that return available to the place where you’re applying for the loan.
2. Postpone personal debt – don’t buy a new home or boat just yet; delay planned major purchases until after applying for and closing your loan.
3. Pay down debt – take the obvious steps of reducing any existing credit card or other debt you have as much as possible.
4. Make sure your internal financials are as accurate as possible – sometimes business owners don’t pay enough attention when recording expenses and income. Make sure your numbers are accurate! Good internal accounting software helps, but is not essential. A second set of eyes from a financially savvy person goes a long way.
5. Keep your personal credit score as high as possible – Make sure you don’t have “late pays” on your credit. You can use Annual Credit Report.com or www.creditkarma.com to get a free copy of your credit report. Review the marks on your report to make sure they are all correct and work with your bank to correct any inaccuracies.
This post is part of a series called Small Business Tips For Success by CDC Small Business Finance, the nation’s leading provider of small business financing via SBA programs. Find us online at www.cdcloans.com and on Twitter at @CDCLoans.