Starting a business requires careful consideration and planning. One is in obtaining and using capital for business purposes. We also need good planning when deciding to get a business loan from a bank.
Capital contributes to the continuity of a business and there are some requirements for the bank to approve the business loan application. Check out some ways to ensure a smooth business loan application process at the bank as well as the tips to leverage them.
Tips for Borrowing Money from a Bank to Start a Business
Many prospective businessmen abandon their plan to start a business due to the lack of financial capital. Applying for a loan from a bank can be a way to get capital.
Getting a loan from a bank to start a business does require several requirements. Here are some ways you can do to expedite the process of getting a loan from a bank.
1. Complete All Necessary Requirements
One way to get a business loan approval from a bank is to complete all documents or meet the requirements imposed by the bank. Before submitting it to the bank, check carefully to see whether or not the requirements are met.
2. Convince the Bank
Usually, before approving a loan, the bank will consider several things related to the prospective applicant’s data and business model. Try to convince the bank that the business has a wonderful future ahead of it. With clear reasons, details, and detailed explanations related to the type of business, as well as the business potential, the loan application has a higher chance of being approved.
3. Build a Positive Self-Image
Another thing that banks consider when approving a loan application is a positive self-image. This means that business owners do not have a negative record in the banking world, such as having a good credit score.
How to Leverage Bank Loan to Start a Business
If used wisely and correctly, business loans from banks can help a business grow. Follow the tips below to leverage a loan more effectively.
1. Only Use Capital for Business Purposes
One thing that often makes people lack capital is when they use the loan for other purposes. For example, using the funds to meet daily needs.
When applying for a loan for business needs, make sure to only use the funds for your business. For example, renting an office or business lot, paying for advertising, buying equipment, or paying employees. That way, the loan can be used according to the initial purpose of the loan.
2. Adjust the Business to Capital
Business planning must be made from day one. It serves as a reference for prospective businesses in determining the amount of capital they need.
For example, opening a coffee shop with a unique concept may require tens of millions of rupiah in capital. But this is different if you are to open a street stall whose capital is less than a coffee shop.
The estimated capital and loan size must match to ensure a smooth run. This is also to avoid borrowing too much which will subsequently become a heavy burden of high monthly payments, and lead to bad debts.
3. Save Business Profits for Expansion
When the business is running and making profits, don’t rush to spend the profits on consumption. Preferably, use these profits for business expansion.
4. Avoid Late Payments
When the loan is approved, one of the borrower’s responsibilities is to pay the installments according to the time agreed with the bank. Paying them timely can create good credibility.
This is certainly heavily in favor of the borrowers if they want to borrow again for even greater business capital. To work around this, businesses can use an auto-debit system or automatic payments to the bank. So, there is no room to forget or be late with your payments.
5. Submit Another Loan If Needed
Applying for a new loan shall be done if the initial loan is not sufficient to run the business. Generally, the bank will simplify the loan process if the payment records are good. Make sure to borrow as needed.
Getting a business loan from a bank can be done by any business. However, you need to leverage it correctly and optimally. That way, the loan can be used effectively to start and grow your business.
Now that you learn the tips above, it’s time to find out more about BCA Multipurpose Business Loan (KMU) by clicking the button below: