As an entrepreneur you must have “your feet on the ground” to get financing. You depend on it for your business idea to flourish.
It is important to avoid certain mistakes when looking for a loan, so that the financial institution does not close the doors.
1. Not knowing who you are and where you stand.
Identify what cycle your business is in, what financial need you have, what you need the resources for and how much you need.
2. Touch only one door.
There are several formal financing options in banks and cooperatives. Study and analyze which one best meets your needs.
3. Borrow more than you need.
Verify that the credit is not greater than 30% of your profits, so you do not have to pay it at the end with your own resources.
4. Watch the deadline.
Choose a loan with a term longer than the time in which you plan to recover your investment. For example, if your investment is $ 1,000 and you will get it back in a year, ask for a loan that you have to pay back in 18 months.
5. Lack of seriousness.
Deliver the complete documentation and at the same time so as not to give the impression of being an unserious company and in default in its payments.
6. Mix personal and business credit.
It is very common that at the beginning of the project the entrepreneur uses his credit cards to finance his business. It should be considered that while it is growing it should formalize and seek non-personal sources of financing.
7. Not formalized.
Inserting yourself into a formal scheme will help companies to be trustworthy to financial institutions.
8. Pay until the last day.
Do not wait until the end to pay the loan installments because there are always unforeseen events. If you are late, you will have to pay surcharges and interest.
