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To get the most out of getting and managing small business loans nz, you can do things like make a budget and keep track of costs. Certified financial planner and CPA Holly Nicholas Signorelli tells would-be entrepreneurs and small business owners to keep their expectations realistic. Signorelli shared the following dos and don’ts of first-time small business loans based on his more than 20 years of experience.
1. Make A Real Budget First.
Signorelli said that about 90% of the time, clients come in with a huge budget that includes millions of dollars in profits. But when you look at the line items, there’s no real evidence to back up the numbers. Instead, there is always a lot of hype about the product, the market, and, most of all, “the potential.” Signorelli made it clear that banks and investors don’t want to buy your idea. They want to make money, he said. For them to agree with your idea, they need to see a way to make money from it. Signorelli said that, with very few exceptions, they won’t invest in your idea if it doesn’t make sense or seems too good to be true.
2. Don’t Worry Too Much About Money.
Signorelli said that if you want to make it through the first year and start making money, you should focus on marketing and getting customers. This way, you won’t have to worry about money. You, as the business owner, have to believe in yourself and your new small business for it to come to life and grow.
Signorelli said that if you have the right budget, the right investor will give you the right amount of money, giving you the freedom and confidence to focus on your dream and make it happen.
3. Do Compare Lenders.
Even between lenders who offer the same type of loan, the terms are never exactly the same. If you find two lenders who are willing to give you the same loan amount, one of them is likely to have a higher APR than the other. The loan with a high APR, on the other hand, might have a shorter term. This means that you will have to pay back your debt for a longer time with the other lender. You should also think about the lender itself. Read its customer reviews and find out how good its customer service is. A trusted lender who is willing to help you might be a better choice than a less trustworthy lender who offers better loan terms.
4. You Should Look At Your Credit Score.
If you have a low credit score, your chances of getting a loan are much lower. The minimum credit score you need for each type of loan is different. This can be as low as 550 for most merchant credit advances and as high as 680 for traditional bank or SBA loans. If your credit score isn’t high enough to get the small business loan you want, there are things you can do to try to raise it.
You may also like: Everything to Know about Business Loans
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