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    Are you an aspiring entrepreneur ready to start a new business? At Global Finance, we understand the challenges faced by would-be entrepreneurs when trying to secure financing for a new business. This blog provides valuable insights and practical advice on how to navigate the world of business loans from our Head of Mortgages, Aseem Agarwal.

    Understanding the unique considerations

    Banks and lenders often carry out more due diligence for new businesses than would normally be done for the purchase of established businesses. They will want to assess the viability of your venture, your industry sector experience, and your management or leadership capabilities. To evaluate your loan application, lenders will consider some of the following:

    1. Entrepreneurial motivation:
    Lenders will want to understand your reasons for launching a business. When presenting your business proposal, you’ll need to clearly articulate what sets you apart from your competitors. Be prepared to explain your passion and vision you have for its success and support it with solid numbers.

    2. Industry experience:
    Demonstrating relevant experience in the industry sector gives lenders confidence in your ability to navigate the market. Highlighting your expertise shows your understanding of the market dynamics and positions you as a credible entrepreneur.

    3. Management and leadership skills:
    Emphasise any relevant management roles you’ve held in the past. Highlight your organisational and leadership capabilities to assure lenders that you have what it takes to run a successful business.

    4. Viability and competitiveness:
    Clearly articulate your unique selling point (USP) and outline how your business will stand out in the market based on research to support your claims. Demonstrate you have conducted thorough market research to understand your competition, target audience, and how you plan to differentiate your products or services.

    5. Cost considerations:
    You’ll need to outline the anticipated expenses for setting up your business, including fit-outs, purchasing goods and services, and potentially hiring staff. Provide a detailed breakdown of these costs to give the bank a comprehensive understanding of your financial needs.

    The importance of a robust business plan

    A robust business plan is crucial when seeking a business loan. It serves as a blueprint for your success and helps demonstrates to lenders that you have thoroughly assessed the market and have a clear strategy for profitability and growth. Here are key elements of a well-thought-out business plan:

    1. Cash flow projections:
    Work with an accountant to develop cash flow projections for at least two years. This demonstrates your understanding of the financial aspects of your business and provides banks with a realistic view of your revenue and expenses.

    2. Clear goals and strategies:
    Clearly define your business goals and outline the strategies you’ll implement to achieve them. This shows your commitment and vision for the future.

    3. Be well prepared:
    You absolutely need a well-structured business plan, so seek the assistance of a business mentor or collaborate with your accountant to help you create one. Their expertise will ensure that your plan addresses all necessary points, encompasses your market research, financial projections, and operational strategies, and aligns with the banks’ expectations.

    Interview and aspirations:

    If you’re asked for an interview so prospective lenders can gain deeper insights into your aspirations, motivations, and how you plan to run the business, be fully prepared to discuss your vision and demonstrate your commitment. You should also highlight any relevant experience or qualifications that showcase your capability to run a successful business. This could include past roles, certifications, or educational achievements.

    Funding and financial contributions

    Banks tend to be more conservative when financing new businesses compared to established ones. When it comes to funding, lenders typically prefer a balanced approach; they expect entrepreneurs to have a significant financial stake in the venture. It’s common for lenders to expect a 50% contribution. This can be in the form of cash or assets, such as the equity in your home.

    The role of Global Finance in simplifying the loan process

    Navigating the loan application process can be overwhelming, especially for first-time entrepreneurs. With over two decades of experience, our team of experts understands the intricacies of obtaining business loans for new ventures. We can act as a middleman between you and potential lenders, providing valuable guidance and support.

    “We specialise in setting up loan applications for successful approval,” says Aseem Agarwal. Here’s how we do it:

    1. In-depth knowledge of lending requirements:
    Understanding the current lending climate can significantly impact your loan approval chances. We have comprehensive knowledge of the lending landscape and understand the ever-changing preferences of banks. By staying updated on sector-specific lending trends, we can provide valuable opinions and insights, saving you precious time. As certain sectors may be favoured or more heavily scrutinised by lenders at different times, we’ll focus on banks that are more likely to support your business.

    2. Tailored solutions and personalised guidance:
    We’ll analyse your situation, and provide one-on-one guidance, ensuring that you’re well-prepared. By working with us, you can save time on unnecessary credit checks and assessments.

    3. Strong relationships with banks:
    Over the years, we have built strong relationships and have a wide network of contacts. Thanks to these, we can present your case effectively to the right lenders, increasing your chances of success.

    4. Detailed, focused submissions:
    Before submitting your loan application to a bank, we will have workshopped the deal to determine the bank’s appetite for your specific type of business venture. So, when we do approach lenders with your application, we will know they are open to lending to your sector, all necessary documents will be in order and your case will be compelling and well-articulated. Our detailed and meticulous approach saves you from unnecessary delays and rejections.

    Preparing you for success

    Starting a new business is an exciting but challenging endeavour. So, don’t let financing hurdles hold you back. With comprehensive preparation, a solid business plan, and the guidance of experienced mortgage advisors, you will secure the best loan terms for your business or commercial venture.

    The information and articles published are true to the best of the Global Finance Services Ltd knowledge. Since the information provided in this blog is of general nature and is not intended to be personalized financial advice. We encourage you to seek Financial advice which is personalized depending on your needs, goals, and circumstances before making any financial decision. No person or persons who rely directly or indirectly upon information contained in this article may hold Global Financial Services Ltd or its employees liable.