View Full Version : Advice on how to approach lenders?

06-21-2005, 06:12 PM

New to the forum, seems a great place to share advice and tips on business! I was wondering if anyone could offer any advice on funding.

I have a new company, (launched 9 months ago) I'm currently running it from home, selling over the net. However, the company has a great potential to grow quite quickly. However, it needs the finance to really get this opportunity of the ground.

Current situaltion is: Sell through the company website and we have just launched a reseller program. We are currently getting our supplies form America but with the site beginning to get noticed and our reseller program launched, we are looking into importing direct from China to increase profitability.

The company needs finance for the stock initially however as I run this from home, we have to look into storage premises.

So we need a loan for:

Importing Stock
Taking on Staff

However, my situation isn't too appealing to a lender. I live at home with parents. All the capital I had has already went into the business therefore I cannot offer any more money to meet with the lenders amount.

I was hoping to approach Scottish Enterprise or The Princes Trust first as I am within the age bracket to recieve their help.

Has anyone had any experience with this? Can you offer any advice?

I know I need to get together a sound business plan and accounts, is there anything else I should prepare?

*(accounts are definately not my strong point so if anyone could recommend an accountant who can help me set up the company accounts to present to lenders, it would be greatly appreciated)

Sorry, that turned out to be quite a long post. Hope you can offer advice.



07-01-2005, 02:08 PM
You would have to come up with money down, 30% is a safe bet.

07-06-2005, 05:09 PM

You wouldn't necessarily need to have to put money down, depending on how you chose to borrow the money, but I would really need some further information to advise you any further on the subject.

01-15-2014, 11:16 PM
Basically, you have to give an assurance for these lenders that you are able to pay them back. That's the only way to win them. If you have enough proofs that you can do it, then you're good. But these proofs must be strong though. Ready all your documents so they could do some credit check.

01-16-2014, 07:12 AM
A question I always ask myself in such a situation is: "Do I really need the amount of money? Where can I save some?".
I know it is fun to expand but sometimes it is better to try and keep up with demand with your current facilities.

What I would do is to keep going and save the money until you really need to expand. This way you can come up with a decent amount of money and the lenders will be much more inclined to loan you the rest.

01-16-2014, 08:03 PM
If you have an existing credit card or know someone who has (let's say your parents), cash advance is the easiest way to do it. Although of course the interest is much more expensive compared to direct bank loans, the process is very easy, almost similar to just withdrawing from your own account. You get the money real time and this is basically valuable in business.

01-28-2014, 05:33 AM
The first advice I can give you is, Never allow the thought of borrowing cash enter your mind. Loans have a tendency to make the process more profitable for your lenders than your business. Having to pay those exorbitant interest rates could keep you in debt for the rest of your life instead of making the money you wanted to make when you started your business. I understand, I've been there before. You feel like your business is your baby and you want your business to grow as quick as your ideas. There's nothing wrong with wanting to expedite the transition from garage, to SME then eventually a brand or company. However, you should understand that if a business is not adding profit for expansion, there's a screw loose and you need to make sure everything is full-proof. An airtight business plan is almost as impossible to find as a snow leopard, but just make sure you've covered your bases. If you believe that your business plan is solid, consider looking for investors instead of lenders. Investors will have a stake in the business's profits therefore they'll have your success in mind. Getting 60% of one million dollars is much better than 100% of five thousand dollars. Try to avoid lenders as much as you can but if you must, go to a bank with your solid business plan. NEVER GO TO LOAN SHARKS. They'll promise you fast cash, but they'll ask for that cash back faster than than you'll know what to do with it.

01-28-2014, 11:31 AM
Even though this is an old thread, it's definitely one worth looking at.

Lenders do like to see that you have a significant sum of money saved up. Having good credit or a co-signer can help.

I don't think business loans are a bad thing, but I think it is important to be careful with them. Saving up or having people invest in your company is a safer bet and can help you get started with a lot less debt.

01-28-2014, 12:08 PM
Ok, so here's what I am seeing. You need to have good credit. You didn't mention your age, but I am assuming since you are running your company out of your parents' home that you are a younger entreprenuer. This is ok if you are over the age of majority (18 in the US). If you aren't, you can't take out a traditional loan. No one under the age of majority can enter into a contract with a financial institution (or anyone else for that matter). So, if you are over the age of majority, you need a solid business plan, decent credit, some collateral, and business financials that support a successful business that is making money. You can present these items to both get a loan or to attract angel investors. You also need to be able to show exactly what you are going to use the money for as well as what the expected return will be on the investment. This will be part of the business plan.

01-28-2014, 02:26 PM
My take on this is why not try cash advances on your credit card? That's the easiest way to get money quick that you would need for your business. The interest rates are definitely higher if you're not able to pay for it in bulk and only do minimum payments but it would be worth it later on as soon as your business has moved forward because of that particular investment. Take it as a form of investment, which is always higher at the beginning of the business and pays off as soon as you've achieved your business objectives.

01-29-2014, 10:14 AM
Taking cash advances from credit cards is risky business. First you have to have the credit limits that will allow you to take enough off the cards to make it worthwhile. And second, these are really expensive. They oftentimes have a separate interest rate that is significantly higher than that assigned to purchases. This makes them very expensive and you can ruin your personal credit if you can't pay them back. This is an option, but once that should left as a last resort.

01-29-2014, 02:57 PM
Considering the original post was nearly a decade old, I hope that he didn't take cash advances to pay for his business, or he might still be paying on them. That is good advice though. Cash advances carry a very high interest rate, and I don't think that I would gamble with my money like that.

01-30-2014, 08:35 AM
Before even thinking of approaching any lender ensure that you have a well record of business transactions taking place in the organization. Hire the best accountants to keep all records. This is the most important way of convincing a lender. Proper accounting will show the lender the financial capability of the business. How much funds is the business able to raise?
Lenders will use the information to see how much they can give.

01-30-2014, 09:39 AM
You will also have to include money for a freight and possibly a dock to have your items shipped too. As others have suggested, I feel that 25%-30% down is a reasonable amount to have before you even consider contacting a lender. This will demonstrate that you are serious about your upgrade and just need a boost in order to complete your expansion. Try and get quotes from as many companies as you can in order to compare the best rates and regulations of the loan. Bringing legitimate copies of your sales and possibly your income has never hurt. This shows the lender that they will be investing in a business that is actually making money.

01-30-2014, 10:09 AM
You will need to have some cash on hand in order to show the lender that you are as invested in your business as you are asking them to be. You will also need good credit, possibly a cosigner, some collateral and proof that your business is profitable and that your plans will make it even more profitable. You need to be able to prove to the lender that you are not only trustworthy when it comes to repayingyour debts but that you will have the income to be able to meet your commitments.

02-14-2014, 01:50 AM
Approaching lenders is a tricky prospect. You have to be careful that you do not come off as excessively needy because then, you will not be able to negotiate the terms of debt to your advantage. What most lenders look for is collateral and your ability to pay back the loan. If you can sufficiently answer the lender's doubts in this regard, you won't have any problem in getting a loan. Alternatively, I would also suggest you to look into getting a venture capital. as you won't have to arrange collateral for it and it has the added advantage of coming without a charge of interest. But an investor would demand a share of your profits and would only be willing to invest if he has some confidence in your idea.

02-14-2014, 06:32 AM
Just ask for money from closer friends and relatives. Lending companies and other loan sharks are bad for you since they will make your debt into a monumental disaster until you won't be able to pay for them anymore.

dave hunter
05-13-2014, 02:52 PM
hey LT,

If your company is really generating alot of income and you have been in business for over 9 months, your bank may require some form of collateral. Im not sure if you have any collateral and i would need a little more informe=ation about your company to determine that. However, i work with a company called VMC Capital. im not sure if you may have heard of it. we provide business owners with an alternate form of funding. no collateral needed. and as long as you have been in business for over 4 months and are generating over $8,000 in gross monthly sales, you should be qualified. give me a call or visit our website when you have the time. vmccapital.com

844-801-2274 ext 5415
Dave Hunter

05-17-2014, 01:27 PM
I have access to multiple lenders and lending stuctures. My e-mail is maymortgageandfinancial@aol.com or call 803-807-6646.

Michael Thompson
05-19-2014, 10:57 AM
Yes, This is good idea of lender, he can help you in your loan and also there are some lenders who offer low interest rates. Best of luck

09-15-2014, 03:30 AM
It is very difficult for a person to approach money from the lenders and you need to put some strategies like you have to understand the basis of which the loans are made to stack up our financial and other business plan.

09-27-2014, 03:11 AM
If you have an existing credit card or know someone who has (let's say your parents), cash advance is the easiest way to do it. Although of course the interest is much more expensive compared to direct bank loans, the process is very easy, almost similar to just withdrawing from your own account. You get the money real time and this is basically valuable in business.
I think you have given the right way to approach the lenders.

10-07-2014, 03:18 AM
Applying for business loan is intimidating and stressful, there are having some steps that company executive can take to avoid some of the possible confusions. Approaching to a lenders is not having the stressful, do a proper research for lenders.

10-11-2014, 01:12 AM
Before you start any business you need a financiers or lender who will give you fund or lend you money to start a business. There are many banks and persons who are giving lenders to start a particular organization or company. You collect all your documents and necessary legal papers that are needed to lend money or loan.

10-11-2014, 01:15 AM
Before you start any business you need a financiers or lender who will give you fund or lend you money to start a business. There are many banks and persons who are giving lenders to start a particular organization or company. You collect all your documents and necessary legal papers that are needed to lend money or loan. You should have to approach many banks and financial advisor to will give you money for the business.

05-31-2018, 05:56 PM
As far as lenders go, i would start with the US Small Business Association, a good article explaining what to do can be found here: http://b7y.us/FORBES_SBAloanHow2

06-04-2018, 05:50 AM
You wouldn't really need to put cash down, contingent upon how you obtained the cash, however I would truly require some additional data to prompt you any further regarding the matter.

11-15-2018, 11:01 AM
Might be a little late. But this company helped me. They have over 75 lenders that bid for your loan. And they accept all types of credit. They really have a deep portfolio of products. Here is more information. Hope this helps. NBC- https://bit.ly/2qOplkd -Ed

10-09-2019, 06:18 AM
Normally, you need to give an affirmation for these loan specialists that you can pay them back. That is the best way to win them. In the event that you have enough evidence that you can do it, at that point you're great. In any case, this evidence must be solid, however. Prepared every one of your archives so they could do some credit check.

10-09-2019, 11:07 AM
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10-19-2020, 02:58 AM
Write a business plan. Vague ideas scribbled in your notebook won't impress lenders. ...
Organize your paperwork. ...
Determine how much money you need. ...
Be prepared to put your own skin in the game. ...
Know your business numbers. ...
Be transparent. ...
Ask questions about the process. ...
Read the fine print.

10-29-2020, 03:05 AM
You can get help from online platform that helps people to meet online lenders. One of the option is Your Own Funding (https://yourownfunding.com/).

10-30-2020, 11:49 AM
Thanks for sharing with us

11-04-2020, 12:15 AM
9 Things Startups Must Know Before Approaching Lenders

Compose a strategy. Dubious thoughts jotted in your scratch pad won't intrigue banks. ...

Arrange your administrative work. ...

Decide how much cash you need. ...

Be set up to place your own personal skin in the game. ...

Realize your business numbers. ...

Be straightforward. ...

Pose inquiries about the cycle. ...

Peruse the fine print.

Act naturally.

12-14-2020, 12:34 AM
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12-14-2020, 05:13 AM
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12-15-2020, 11:06 AM
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