Pharmacies Small Business Loans
Getting your very first Pharmacy business loan is an exciting time. It means you’ve come a long way in your business and are ready to expand, upgrade, or remodel. But getting a business loan can be a confusing experience for anyone. It takes careful planning and patience. You will want to prepare yourself as much as possible before you apply with a lender. We are here to help you out and provide all the tips you need to succeed.
Consider All Your Options First
Before you dive headfirst into the application process, make sure you know about all of the options that are available for you. Consider whether or not you really need financing at this point in time. You may find that a business credit card will provide you with what you need, or you could consider an angel investor who will provide the capital you require for your business. However, a Pharmacy business loan loan may be just what you need for your company at the moment. If so, you must know how and where to find the financing that is best for you.
Your Credit Score is Important
Before you even apply for a Pharmacy business loan, you will want to take a hard look at your credit score. Thanks to the Fair Credit Reporting Act, your credit score and history are always free. You can find your information on websites such as AnnualCreditReport.com and freecreditreport.com. Once you have signed up with a company, carefully look at your score and your credit history.
Personal and Business Credit
You can have two types of credit- personal and business. Many entrepreneurs use their personal credit in order to start up their company. While this is a common course of action it isn’t the recommended one. That’s because things can get very confusing when it comes to that dreaded tax date or when asking for a Pharmacy business loan. If it’s possible, establish business credit separately. One of the easiest ways is to start off with a business credit card. It will avoid confusion in the long run.
There are a couple of very common mistakes that people make that ends up lowering their credit score. One is carrying a high outstanding balance on credit cards. You may make your payments diligently every single month, but you will still be penalized because of your high amount of debt. The solution is to pay more every month to get your overall balance lower. Another mistake is missing payments or paying on debts late. Even a few late payments can drop your credit score.
Improving Your Credit Score Before Applying for a Pharmacy Business Loan
Now that you have gained access to your score, take a look at your actual report. You may find issues that are causing your score to stay lower than it should be. Don’t worry- these can be fixed. Again, you will want to do this before you apply for a Pharmacy business loan, in order to have the best record possible.
1.Errors happen, even when it comes to credit reports. Check for any negative activity listed on your report that you have since taken care of. If you find any, report it. Remember that you will have to dispute the error, so it may take a little time to come off of your report as they work on it.
2.Take care of any old debts you find on the report. It’s not too late to fix things with old companies. You’ll see exactly who you owe and how much you own on your report. Take care of the debts as quickly as possible so they can be erased from your report. It is also important to pay down your credit card debt, as well.
3.Pay off any tax debts you are dealing with. Whether they are state or federal tax issues, these debts will leave a huge negative mark on your report. Get in touch with the government entity that handles these issues and set up a payment plan or pay the debt off in full.
4.Keep your balances down and pay your bills on time. Yes, we have said this before, but this is one of the most important ways to keep your credit score high. Just because you have a high score doesn’t mean you should relax and get sloppy with your debts. Stay vigilant and pay your bills when they come in. Your credit is something that should be monitored frequently.
5.Take advantage of a credit monitoring service. Keeping track of your credit can be time-consuming. A credit monitoring service will watch your credit report for you. They will alert you to any big changes and will catch fraudulent or suspicious activity on your report.
It’s Time to Apply for the Pharmacy Small Business Loan
Now that your credit is taken care of, you’ll want to gather all of the necessary documents you will need to apply for the actual loan. Let’s take a look at everything you will need before you meet with your lender.
Put together an estimate of what you will be using the loan for. Do you need to purchase newer equipment for your company? Write down the costs of the equipment, how much labor charges will be to install them, and the projected cost of running this equipment. You want to show the lender exactly what your company will be using the loan for.
These show the lender how your company is currently doing and what you project to do in the near future. Get together with your accountant and gather your income and cash flow statement, along with your profit and loss statement. Having these to show your lender will help you answer the questions they are bound to ask, such as where you are making the most profit and if you are expecting to continue on this path.
Different lenders will ask for specific documents, but you should be prepared to bring the following with you: tax returns for the past two years, your accounts payable and receivable information, and your balance sheets.
Understanding the Offer
Once you have received your offer of a pharmacy small business loan, make sure you understand the fees and interest rates you will be charged. Based on your credit score, the offer will include an interest rate and an APR. Make sure your lender carefully explains the terms to you so you know what you will be paying in the months or years to come.