Owning your own business is a dream for many people. Unfortunately, a business requires significant capital to run smoothly. Without capital, business development is hampered because promotion and innovation require significant funding.
Fortunately, funding can now be obtained from various sources, including banks, cooperatives, investors, and even online financial platforms. Simply choose the one that's most secure to ensure your business continues into the future.
6 Tips for Getting a Cash Loan for Your Business
Regardless of the amount of capital you need, you can get your application approved by the bank by following certain tips. Some of these tips include:
Selling Personal Assets
Having assets with high resale value is an advantage, especially if you need capital for your business. You can sell personal assets for a certain price and use the proceeds to rent a building, produce products, or even promote your business.
Personal assets can include houses, land, vehicles, gold, jewelry, branded goods, and electronics. If you don't want to sell them, you can pawn your personal assets at a pawnshop and redeem them later to reclaim them.
Develop a Business Plan
A plan is a crucial guideline for running a business. In this plan, you can outline your business objectives, vision, mission, product types, target market, promotional methods, and services to be provided to consumers. Don't forget to create realistic financial projections, such as estimated capital, expenses, and expected profit targets.
The bank will then assess the feasibility of this business plan. If the plan is comprehensive, attractive, and convincing, the bank will be happy to approve your loan application. This is because the bank itself is confident that your business has the potential to be profitable.
Determine the Right Type of Loan
There are various types of loans you can apply for to obtain business capital, including bank loans, non-bank loans, and online financial platforms. Each type of loan has advantages and disadvantages that you should consider before applying.
For example, if you need a large, low-interest loan, a bank loan is the right type of loan. If you need a quick loan, apply through an online lending platform. Unfortunately, online loan interest rates are quite high, so you should consider the interest before applying.
Improving and Maintaining Your Credit Report
Your credit report is one of the factors that determines whether or not a loan is approved. Lenders will usually check your credit report first. If your credit report is good, you can get a cash loan for your business, and vice versa.
A good credit report is influenced by several factors, such as:
Past debt repayment accuracy
Possibility of bad debt or default
Loan term
Past loan total
To maintain a good credit report, ensure you repay your debts on time. Pay attention to installments, even small ones, to avoid delinquency.
Prepare Important Documents
Applying for a loan to a bank usually involves a variety of processes. One of the processes involves submitting required documents, such as identity cards, Taxpayer Identification Numbers (NPWP), business plans, financial statements, copies of savings accounts, and other documents.
Each bank has different requirements. Make sure you understand all the requirements so you can prepare your documents promptly. This will ensure your loan application is approved, and you can use the funds to start your business.
Take Advantage of Government Loans
The government is currently implementing a loan program that people can take advantage of to start a business. The program is called People's Business Credit (KUR), which requires no collateral. Through this program, the government hopes to increase the number of MSMEs and encourage them to develop their businesses.
To obtain a loan, the government requires you to have a certain amount of savings according to the scale of your business, namely:
Micro-business owners have assets of IDR 50,000,000
Small-business owners have assets of IDR 50,000,000 to IDR 500,000,000
Medium-sized businesses have assets of IDR 500,000,000 to IDR 100 billion
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