With the economic situation being what it is, bankers and lenders are becoming cautious and in some cases, very stingy, when it comes to lending of money for various purposes. The market scenario continues to remain very depressed and it not very uncommon to come across various degrees of foreclosures. Many small banks have collapsed overnight or have been purchased by larger banks. The situation is very fluid and tomorrow continues to be uncertain as far as the market and economic situation is concerned. In such situations, it is becoming difficult for business houses to raise working capital.
However, things are not as bleak as they seem and provided you follow some common tips, you would be in a position to improve your chances of getting loans for business, even in this bleak scenario.
Banks mean business
First and foremost, it is very important for you to develop a positive attitude as an entrepreneur. This could be a difficult task when there is gloom and despondency all around. However, unless you have your chin up, you would not be in a position to tide over this crisis and get funds that may be badly required for your organization. You could take solace from some of the following facts. Lenders and banks are in the business of lending and hence, they cannot just collect funds and sit on it paying interest on the same. The only way they can make money is by lending it and receiving interest income. Thus, if you are a good borrower with good credentials, there is no reason why banks should not lend to you.
The second important truth from which you can take solace is the fact that banks consider any loans in business as a good way to make money. Banks sit on huge funds and not everything can be invested in real estate or infrastructure projects. Since enterprising entrepreneurs also contribute to the economy by generating employment and paying taxes, there is no reason why banks should not lend to you. The government of the day and banks wants business establishments to stay afloat rather than going down under.
Credit history is the most important thing
In spite of the gloomy economic situation, there is no denying the fact that banks have money to lend. Banks which were not able to withstand the onslaught of the bad economic situation have been taken over by bigger banks. Thus, it is not that banks do not have money to lend at all. However, apart from good attitude, it is important for you to have a good credit history, as an individual. This helps a lot in improving your chances significantly towards getting the right loan. Dressing up smartly and professionally always helps because your appearance speaks a lot, without actually speaking.
Prove your credentials
The next important thing is to prepare a good business plan showing clearly as to how you plan to generate revenues which will not only take care of the business loan repayments but will also enable you to make profits and provide employment for people. You should do your homework properly and should be able to produce all records should they be asked for by the banks and financial institutions.