Month: November 2021

Business loans can be essential to launching a startup or expanding an existing company, with funds often used to secure inventory, purchase equipment, rent operational space, hire employees or cover a host of other expenses. However, business loans can be difficult for new companies to get. 

Before applying for a business loan, make sure your financial documents are in order and that you understand what lenders need from you. A good business plan makes your business attractive to lenders, giving you a better chance of getting a loan.

Are you having trouble getting approved for a Start Up loan? Be aware of these six roadblocks that can keep you from getting approved for a small business loan.

1. Poor credit history

Credit reports are one of the tools lenders use to determine a borrower’s credibility. If your credit report shows a lack of past diligence in paying back debts, you might be rejected for a loan.

It is difficult to qualify for a small business loan with a credit score lower than 700, so if your score is under 700, it is recommended that you focus on fixing it if you can. Begin by checking your personal and business credit scores to ensure they are accurate. If you find any errors, correct them before beginning the loan application process. You can order a free personal credit report yearly from each of the three credit-reporting companies on AnnualCreditReport.com or individually from each credit-reporting agency – TransUnion, Equifax and Experian. To check your business credit score, contact Equifax, Experian and Dun & Bradstreet.

Additionally, you should build a strong personal credit score and drive down any debt prior to applying for a business loan.

2. Limited cash flow

Cash flow – a measure of how much cash you have on hand to pay back a loan – is usually the first thing lenders look at when gauging the health of your business. Insufficient cash flow is a flaw that most lenders can’t afford to overlook. Therefore, it’s the first thing you should consider to determine if you can afford a loan.

One of the preventative measures recommended is to calculate your cash flow at least quarterly. If you take that step, you may be able to optimize your cash flow before approaching potential lenders.

To figure out how large of a loan payment you can afford, divide your net operating income by your total annual debt to calculate your debt service coverage ratio. You will have a ratio of 1 if your cash flow is equal to your monthly loan payments. Though a ratio of 1 is acceptable, lenders prefer a ratio of 1.35, which demonstrates you have a buffer built into your finances.

3. Lack of a solid business plan

Having a plan and sticking to it is much more attractive than spontaneity in the finance world. It also gives you a better chance of getting a business loan.

It isn’t uncommon for very small businesses not to have a formal business plan – or any plan at all – but you’ll still need to put in the time and work to develop a comprehensive business plan before ever walking into a lender’s office.

A standard business plan includes a summary of your company, market, products and financials. If you’re not sure your plan is persuasive enough to sway the lender, consider seeking the advice of a business plan expert who can review it and offer feedback. You should also be prepared to explain how you plan to use the money you want to borrow. 

4. Too many loan applications

Some business owners assume they can cover all their bases by applying for multiple loans at one time. This way, they can pick and choose from a range of potential offers. However, opening too many loan applications at once can be a red flag for credit bureaus.

5. Disorganization

Before approaching potential lenders, business owners should have their act together. That means having all the paperwork necessary for your loan application on hand.

Obligatory documentation often includes a detailed business plan and proof of collateral; extensive financial records such as income tax returns, personal and business bank statements, loan history, and a balance sheet; and legal paperwork, such as franchise agreements, business licenses and registrations.

There are many resources that business owners can refer to when putting together their loan applications. The Small Business Administration, for example, provides a highly detailed loan application checklist for borrowers. Using these resources decreases your likelihood of coming across as disorganized or unprepared. 

6. Failure to seek expert advice

When you apply for a business loan, lenders want to see that you’ve sought guidance from knowledgeable advisors. Fortunately, Unsecured Finances has the knowledge and experience to help guide you through the process. We work with start ups to identify the any opportunities for making their start up look more appealing to lenders. 

Invest in Your Business

Now is the time! With our society ready to get back in action (safely), new business concepts are quickly emerging with creative flows for serving the public without the high risk of spreading the virus. Put your innovative business concepts into play, and connect with us to get the funding you need to start your newest venture!

Financial restraints have been a complaint for many of the dreamers, limiting themselves to their immediate funds. There is an alternative. If you have the dreams and decent credit, Small Business Loans and No Doc Loans are available to you. Our goal is to provide you with the knowledge you need and the resources available to make your dream a reality. Give us a call – we have the education and the perspective to help you obtain the loans you need for your small business. Visit our website or give us a call to find out what financial backing is available to make your business soar!

Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.

Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584

Not everyone wants to buy what you’re selling. For your startup company to be successful, you need to identify your target market.This is one of the first steps of launching a startup company. But it’s much easier said than done.

If you don’t have a clear target audience in mind, your marketing campaigns are going to cost you a fortune. You’ll also have low conversion rates, and your customer acquisition costs will be through the roof. Marketing to everyone and anyone is simply a waste of effort, time, and money. Instead, focus your branding and marketing strategies on a specific group of people who genuinely have a need, want, or interest in your company. Cash in the bank is obviously important for every start up, but for startup companies, it’s their lifeline. If your marketing campaigns are unsuccessful, your startup is going to bleed money. Take a look at the top 2 reasons why startups fail:

Reason #1: 42% of startups failed because there wasn’t a market for their offering.

That’s why identifying your start up market needs to be one of the first steps. If you discover there isn’t a market for what your startup has to offer, you can go back to the drawing board and try something else before you invest too much time and money.

Reason #2: 29% of startups failed because they ran out of money.

Spending your valuable start up marketing budget on the wrong target audience could cause your company to go out of business. With limited cash in the bank, you may not be able to recover from this, but don’t worry.

We’ll explain what you need to do to identify your target market, which will position your startup company for success:

Start with broad assumptions, and slowly narrow your focus. 

Don’t start with a really narrow start up audience right away. Instead, begin with larger groups that you assume may be interested in your brand. From here, you can slowly start getting more specific.

Use a few of these simple and general segments to get started:

• Gender
• Age
• Location

You can also use these broad groups to eliminate people who aren’t in your target market. For example, let’s take a look at some products from the Texas Beard Company:

They sell things such as beard oil, brushes, balms, combs, and any accessory you would need for a healthy beard. So if you had a startup company like this, right away you could eliminate women from your target audience.

Don’t get it wrong, we’re not saying women won’t buy these products. It’s definitely possible women could make a purchase from this brand as a gift for men in their lives, but you wouldn’t make them part of your target audience.

What else can you assume about men who are looking for beard products? Take their age into consideration. It’s safe to assume that neither teenagers nor too many senior citizens would be buying these products. As a result, you would eliminate males under the age of 20 and over the age of 60 from your target audience.

What else can you assume about the people who may be interested in your products? They either have a beard or want to grow a beard. In the example we just used, you’ve already narrowed your target market to men between the ages of 20 and 60 who have beards.

As we continue through this process, we’ll narrow the target audience even more, but for now, this is a great place to start.

Analyze your competition

It’s rare for a start up to come up with a product or service that doesn’t already exist. While the idea for your startup may be somewhat unique, you’ll still be a part of an existing industry. Other people are already doing what you’re trying to do. You’ve got to find out how to position your company within your industry.

To do this properly, you’ll need to conduct research on your competition. Figure out what they’re doing well and what needs improvement. Who are your competitors targeting? Look at their advertisements, visit their website, join their email subscription lists. 

You can attempt to go after the same start up target market or focus on a group your competition may be overlooking.

Are you going to target a niche audience or sell products for the masses?

Will your start up have high quality products/services at a premium price, or are you planning to target cost-sensitive consumers? It will be easier to answer these questions after you research the competition. Analyzing your competition can help you increase profits even after your startup launches. Competitive analysis can also show you how consumers behave in this industry.

Ideally, you want to build long-lasting relationships with your customers, but this idea can vary based on your products, services, brand, and industry. You need to adjust your target market accordingly.

For example, let’s say your startup company sells cars or similar products. A customer today may not be ready to buy another vehicle for another decade. In this case, you can’t rely on loyal and repeat customers. Instead, you’ll have to focus on customer acquisition strategies.

Find out how your competition is able to continually market to different customers and whether their campaigns are successful.

Talk to people

While making assumptions and analyzing your competition are logical places to start, those strategies will only get you so far. If you really want to focus on the ideal target market for your startup company, you need to put in much more work. You need to speak to consumers: see if your assumptions are right. Conduct one-on-one interviews, and use focus groups to test your assumptions.

For example, let’s say your brand’s general target market is women between the ages of 25 and 40. It’s a huge percentage of the population. You’ll have to come up with other ways to segment that target market into smaller groups genuinely interested in your brand.

Focus groups and interviews can give you more information about potential consumers for your company. Your focus groups should have 10 to 12 participants. Show these people different products, services, or marketing campaigns your startup is planning to use. See how receptive they are to what you’re showing them.

Find out more information about the people who have a positive reaction. If you’re interviewing only women between the ages of 25 and 40, what other similarities do they have? For example, you might find out that all the women who liked your products were married. You could also discover that women of a certain social class or annual household income were more receptive to your brand than others.

Make sure you find out as much information as possible about everyone in your focus groups. Have all of your participants fill out a questionnaire before the interview or focus group starts, but realize you won’t find out everything you need after just one session or interview.

The market research phase is an ongoing process. The more people you can talk to, the more accurate your data will be. As a result, it will be easier for you to identify your target market.

Create customer personas

Now that you have a better understanding of your target market, create customer personas to learn even more about their buying behavior. A customer persona will ultimately help you market to this audience.

Make the persona specific to your company. You can tell the example above is for a business selling shoes. This customer persona has trouble finding shoes that fit her because she has narrow feet. Now, your startup company may sell shoes to both men and women, but each persona needs to be unique.

Who is visiting your website?

The traffic to your site can be a good indicator of your target audience. Google Analytics can show you who is visiting your website. The reports are generated and grouped by demographic information. It helps you identify which users on your website are the most valuable.

As you can see, identifying your start up target market is a long process. When you first get started, you’ll need to make general assumptions about your prospective customers, since you don’t have any concrete data yet. Slowly start to narrow down that market based on your brand, products, services, and industry.

Invest in Your Business

Now is the time! With our society ready to get back in action (safely), new business concepts are quickly emerging with creative flows for serving the public without the high risk of spreading the virus. Put your innovative business concepts into play, and connect with us to get the funding you need to start your newest venture!

Financial restraints have been a complaint for many of the dreamers, limiting themselves to their immediate funds. There is an alternative. If you have the dreams and decent credit, Small Business Loans and No Doc Loans are available to you. Our goal is to provide you with the knowledge you need and the resources available to make your dream a reality. Give us a call – we have the education and the perspective to help you obtain the loans you need for your small business. Visit our website or give us a call to find out what financial backing is available to make your business soar!

Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.

Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584

If you’re requesting to borrow money for your business, then it’s time to learn how to write a loan request letter. A business loan request letter is a correspondence to potential lenders which you include with your application package. This is a necessary step when applying to any conventional bank, as well, the SBA recommends you begin with a proposal cover letter or executive summary. This will show that your business is viable, that you are low-risk, why you should be approved, and how you plan to pay it back.

Some cases you won’t need a loan request letter and financial statements might be enough.

• If you are applying to an alternative lender for a term-loan

• If you’re borrowing for equipment, where the equipment itself is the collateral

• If you are asking for a business line of credit

Prerequisites to Loan Application and Request Letter

A good request letter is needed for most loan application packages, but what is most essential is stable credit and a solid plan. Before writing your letter, check on your personal and business credit scores, making any possible moves to improve them, no matter your current situation. Also get organized and prepare your financial statements, this will include:

• Income statements (or “profit and loss statements”)

• Balance statements

• Cash flow statements

Letter Format

When writing a business loan request letter, proper formatting is a must. It’s best practice keeping to a single page, and begin with a heading. A heading has:

• Your name and contact information

• Date of Submission

• Subject line indicating that this is a loan request and stating the dollar amount

• Greeting

Business Loan Request Letter Summary: What Does Your Letter Say?

First, briefly explain the purpose of your letter and the amount you wish to borrow. Next, tell your lender about your business. They’ll want to know:

• Legal name of your company 
• Legal structure (LLC, S-corp, sole-proprietor, partnership, etc.)
• Short description of what your business does
• How long you’ve been in business
• Number of employees
• Annual profit

Elaborate on the purpose of your loan. 

Be specific, telling how you plan to use it. If you will need it to advertise, then give actual figures supporting how you project this to help grow your business. How will you advertise, what are the costs, and what are the projected increases to profit or customer base? Give specific numbers and data.

Summary Your Ability to Repay

Review your credit and financial history, reflect on highlights that reflect that you’re a smart investment for the lender. Summarize previous profits and losses which indicate your small business is growing, as well as payment schedules for any other debts you may have. Give cash-flow projections indicating when you expect to be ready for budgeting repayments, accounting for interest and principle.

Conclude Your Letter

Write a short paragraph that refers to the financial statements attached to your application package. In another short paragraph ask your loan officer to review your package and express your anticipation for talking with them further. 

Templates 

Using a letter template will guarantee your loan request letter will be suitably formatted and looking pro, but it will also make life much easier when writing it. Online sites like LiveCareer and RequestLetters.com provide great resources, or you can search the web for sample letters which can help guide you.

Loan request letters are a necessity in applying for financing for your small business from your bank or the SBA. A well-written letter can maximize your credit score, but it will also add muscle to your application package and help convince the loan officer the worth of your business and that you’re a good risk to take.

Taking a creative approach in marketing your small business is one of the best ways of working smarter not harder and to get the biggest bang from the effort you put into promoting. No doubt the best thing you can do for yourself is to create an outstanding product that sells itself, then your only job is to simply let people know you exist. So how do you get their attention and get your product or service into their reach? More importantly, how do you get them talking about it and triggering a viral buzz that takes your business to the next level? Here we look at strategies to gain the most response from the least amount of input when it comes to getting your business out there.

Everyone loves free stuff and rewards so that’s obviously one of the fastest ways to draw in new customers, but why stop there? Why not give customers even more incentive by offering a referral program with rewards when they bring in more new customers and suscribers? Personal reference might be the most effective type of promotion around, as we trust the word of those we know more than any ad. Referrals are such a solid tool, it’s almost something you can’t buy, and again, only comes with a good product or service that is genuinely useful.

A great way to create connections and build new relationships is by attending trade shows and conferences, where you can meet personally and network with the core of your target base, as well as influencers in the industry who can grow your name for you. Online forums are also a ripe place to glean potential clients who may be looking, unsuccessfully, for solutions to the exact problems your company was designed to solve. That’s also a nearly effortless way to gain more traffic, testimonials, and user reviews, which money just can’t buy.  

Stickers and t-shirts are another subtle way to connect with new people and generate a sense of familiarity to your brand. Many printers have discounted rates when you buy a few hundred, and some offer easy-to-use online templates to help produce eye-catching designs. Hand out stickers to strangers and put them in highly visible places. Soon your company will be known to your new customers before they even know it. Giving out free t-shirts to friends, new clients, and at trade shows will have even greater effect as it’s paired with the unspoken reference from the person wearing it. Both stickers and t-shirts are a time-tested way of getting immense impact from any amount you spend.

One of the most beneficial investments you can make in promoting your business is by investing in the community or a cause your company stands behind. Sponsorships and charity drives are a truly excellent way to introduce your name to new bases, while helping others in the process. Whether it’s as simple as sponsoring a little league team or a local arts venue, or hosting an event that donates to an environmental or social group, there’s no better way to establish yourself than through altruistic activities. For your next product launch, think of a cause that aligns with your mission and find ways to incorporate a fundraiser. Affiliate with different groups and find ways you can cross-promote each other.

No matter how imaginative a campaign, make it something people will want to share and tell others. Figure out how your product can make them look good, and on the cutting edge. Word of mouth is hands down the best way for people to get to know you. There are many other angles you can take, and for inspiration it’s smart to follow innovative leaders in business for fresh ideas. Explanatory videos, made with humor, tend to be extremely successful on social media channels. Contests and challenges are also effective at attracting and engaging users. However you plan to promote your startup or existing small business, remember that people power will get you farthest when trying to expand your presence and profits. Always keep an eye on taking care of your customers and they will undoubtedly take your business where you want it go.