Small Business Loans Bicycle Shops

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Small Business Loans Bicycle Shops

If you are a small business owner who is looking to expand your current business, or if you are about to start your company from scratch, a business loan may be just what you need. However, the process that occurs when you need to get a bicycle shop small business loan can be confusing, especially for a first-timer. There are a number of facts to be aware of before you take the plunge.
Before You Apply for a Bicycle Shop Small Business Loan
It’s important to understand your options before you even apply for a bicycle shop small business loan. For example, you may be able to receive the financing that you need from angel investments or business credit cards. Understanding the pros and cons of these other options will help you decide which financing option is best for you. If you need a large sum of money, a term loan is often the best choice.
Credit is Everything
Would you be comfortable lending a friend a $1,000 if you knew they would likely not even repay it? That’s how lenders feel when they see a low credit score. The first part of getting a business loan is to fix your credit issues before you even apply. Your lender will then consider you to be a good risk for a term loan. Additionally, your APR and interest rate will be based on your score. The better your score, the lower the interest rate. It makes sense to clean up your credit as soon as possible.
To get started, check out websites such as AnnualCreditReport.com or freecreditreport.com for personal accounts. To check on business accounts, go to CreditSignal.com. Accessing your personal and business credit score is free.
Personal and Business Credit
It’s best to establish two separate accounts concerning your personal and business credit. This helps to avoid confusion when applying for a loan or filing for taxes. However, your personal credit score will still matter when it comes to lenders, so you will want to make sure your history looks good.
How to Fix Your Credit Issues Quickly
As stated before, it is crucial to fix mistakes before you apply for a bicycle shop small business loan. Let’s look at a few tips that will help you accomplish this task:
Look for errors- Unfortunately, some creditors do not report fixed issues to the major credit bureaus. You may have paid off old debts only to find they are still being held against you. Report any error that you have caught immediately. Remember, these errors will stay on your report unless you dispute them.
Take care of tax liens- Tax problems have a way of coming back to haunt us. If you find one on your report, call the government agency who is responsible and ask how you can repay it quickly. While most will offer payment plans it is even better if you can pay it off in one lump sum.
Pay down past-due debts- If you have unresolved debts on your credit report, pay them off as soon as you can. Call your creditors and ask for a goodwill adjustment. This means that the lender will erase the payment that is late from your credit report. Additionally, many debt collection agencies will cut your bill in thirds or even in half if you pay it off in one lump sum.
Now that you have taken care of your past issues, be sure to keep up with your obligations. Get into the habit of paying your bills on time. There are a couple of practices that will help you keep your credit score high:
Keep your balance low- If you are using credit cards, try to only use less than 30% of all total credit that the company has made available to you. Doing so will show lenders that you are able to pay your debts without relying on your credit cards for everything.
Don’t close an account- Many people believe that once they have paid off a credit card that they should close it- don’t. Doing so will lower the total credit amount you have available to you, which then negatively affects your credit score.
Fight against credit fraud- Hire a credit monitoring company that keeps an eye on your credit report. Many companies only charge $20 or less to watch for fraudulent charges.
Come Prepared With a Budget
One of the best ways to show the lender that you are committed to using their bicycle shop loan the right way is to have a budget already made up. This will show what you are planning to use the bicycle shop business loan for if you are approved for it. Get an estimate on what you will be using the funds for. You should also make a chart of how your improvements will bring in revenue for your company. The numbers you come up with do not have to be exact.
Putting Together Financial Statements
Your financial statements show a lot about your current financial situation, the same as your credit report. Your accountant will be able to help you gather the following information:
•Profit and Loss Statement
•Cash Flow Statement
•Balance Sheet
When these documents are in front of you, you will then be able to answer these questions:
Where and how is your company bringing in the most revenue?
What are your major costs?
Are you bringing in a profit?
If you are looking for a loan to help you through tough times, the answer to this last question may be no. You’ll want to have a plan ready to go concerning how you will turn this around. Maybe you need to use the loan to open another store, or maybe you will have to find another supplier that doesn’t charge as much for supplies. Being able to show that you have a plan in mind will help you make a stronger case as to why you need the loan.
You will also want to bring along your tax records for the last two years and your accounts payable and receivable documents.

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