On January 10, Josh Gutstein from the Chicago Minority Business Center joined us on the Profit and Laws Radio Hour. Josh helps small businesses find cash. Here are 5 killer tips to get loans for your business.
- Do your homework. Know how much cash you need and why you need it.
- Identify collateral. Lenders look for collateral they can seize if you don’t pay them back. “Collateral” means customer invoices, real estate and equipment. Line up some customers and orders in advance. You may have to moonlight. And, don’t steal business from your current employer – it’s a violation of your duties as an employee.
- Tend to your personal credit. Lenders look to your credit history to predict your business repayment tendency.
- Break your cash needs up into manageable pieces. Don’t assume you need one massive solution. For instance, if you need to buy equipment, you could either rent it or finance it through companies that finance equipment.
- Buy an existing business instead of starting from scratch. This is the most eye opening trick of them all. When you start a business, lenders have no way of really knowing if your business will actually make money. Lenders may be more likely to see you as a good risk if there is an actual business that you can use to pay them back. Buying a business could be a shortcut to your start-up dreams. I’m going to focus on this in later posts, because I think it is such an amazing idea.