Steps to Getting a Small Business Loan in New Zealand
If you are not already running your small business it could be that you need a small business loan to set you on your way to owning and successfully running your own small business. So before you go out and apply for your small business loan you might like to read this guide so you know the best ways to prepare your application and have a better chance of getting your small business loan approved. Once you have had your loan approved I wish you all the best in your chosen career path and hope it leads you to be successful.
Start by Planning Ahead
Your first steps should be that you are prepared with your ideas well in advance and this is especially true when it comes to preparing your application for a small business loan. By being prepared and getting an early start can make the difference between your getting the best deal available or your coming away with a really poor deal, or even having your loan rejected outright. Good preparation is essential in achieving success for your business. You really should be planning at least a couple of months ahead of your proposed opening date.
Your Credit Rating
When applying for a small business loan banks will begin by looking at your credit history. If it is an existing company they will be looking at your company’s credit rating. If you are applying for a small business start up loan they will be looking at your personal credit history. The banks will also look into your personal credit history if your company is less than three years old. This can mean that any unpaid or overdue bills (particularly on your credit cards) or missed mortgage payments can result in your application being refused.
Call Stephen to make an appointment to discuss YOUR business loan needs: 09 377 4433
Checking your Credit History
In New Zealand there are three locations where your credit details are held, they are:
- Veda Advantage
- Dunn and Bradstreet
You should consider checking your business and personal credit reports from each of these. If you think there are any discrepancies you can dispute these errors through the Citizens Advice Bureau.Your Business Plan
Having a good business plan in place is essential and takes time to develop. It is also an essential part of your small business loan application. Until you have completed the preparations for your business plan you will not know how much you would like to borrow. This applies both for a start up plan and to grow or expand an existing business. There is a good guide that outlines what you need to include in a business plan or how to develop your own from the New Zealand Trade and Enterprise
How to Present Your Business Plan
Once you have completed your business plan and you know how much you need to borrow the next step is to present your ideas to your bank. The presentation of your business plan should outline the goals you predict for future growth but you will also have to explain how, where and on what you plan to spend every dollar you are borrowing on. You will also have to show in your presentation how you plan to make the repayments for your loan.
Please don’t walk up to the branch by yourself – your finance professional is there to provide guidance and help discuss your needs. As an experienced commercial banker, I know what the bank is looking for and can make this process less stressful and achieve a much better outcome.