By Luis Aureliano

Businesses are evolving in ways we never anticipated. The conventional small businesses at the turn-of-the-century have given way to multinational conglomerates – juggernauts of the modern era. Likewise, traditional sole proprietors have started to seriously consider other options to save on their tax payments with things like S-Corporations, and the like. All of this is geared towards greater efficiency, profitability, and effectiveness of business operations. The workplace is a hive of activity, and with unemployment falling to record lows in the US, the world’s #1 economy is quickly heading towards full employment. Where does that leave folks who are seeking opportunities in the workplace?

What Type of Business are you Looking at Starting?

Sometimes, it pays to adopt an unconventional route to finding the right balance. Often, new business owners will wrestle with the notion of e-commerce versus traditional bricks and mortar enterprise. There are merits to each, but the pendulum tends to oscillate towards the lower-risk option of home-based enterprise. For starters, e-commerce offers multiple opportunities to enter the competitive retail arena with minimal investment. Getting started with a business idea requires a blueprint for the future. This strategic roadmap should forecast at least 3 – 5 years into the future, and it should take into account the financial requirements of the budding business.

First things first – how should you go about getting a business loan? Once you have a notion that is viable, your strategic roadmap should light the way for you to achieve your business objectives. New businesses need to be nurtured from inception to delivery, and that’s precisely where the determination, ability and fortitude of the founder & leadership team come into play. It isn’t necessarily easy to be approved for a business loan from the traditional banking sector since there is a lot more scrutiny leveled at new businesses. According to the stats, as many as 82% of applications for small business loans (SBL) are denied by the major banks. This is a worrying statistic, since it means that just 18% of loans are being approved. Remember, the costs incurred by banks for underwriting SBLs are the same as for large loans. Therefore, banks will be far more careful in how they approve loans for businesses.

Canada is home to vast mineral resources. In fact, it is no secret that Canadian crude oil and other energy resources power the economy. With the approval of the Keystone pipeline project, and various other initiatives, the Canadian economy is roaring back to life after years of stagnant growth. This means that lenders are increasingly optimistic about prospects in Maple country. After a slumping crude oil prices in 2014/15, we are now seeing stabilization taking place in the $50 – $60 per barrel range. This is good news for entrepreneurs, small business owners and investors across all 10 Canadian provinces and territories. Non-bank lenders are coming on board, providing the necessary financial resources to help new business owners get up and running. Of course, it’s imperative that your business’s potential be elucidated as clearly as possible.

Keep Tabs on Balances and Account Standings

Loan applications are contingent upon business plans being as clear and convincing as possible. In that vein, it’s important to put yourself in the lender’s position. What will the lender be looking for from your business? What types of financial documents would be required? If a business generates annual revenues of $250,000, it is considered a viable prospect, while $500,000 is considered superb. There are many other factors that come into play in determining who gets approved for a loan and who doesn’t. Credit scores of 600+ or 700+ are far better for loan purposes. Another factor to consider is money-management. If the small business has shown that it can maintain an average bank balance of $5,000 +, that’s definitely a plus point when it comes to small business loans. And in much the same fashion, the longer your business is in operation the more likely you are to be approved for a business loan. Once the documents have been collated, it’s time to compare lenders for the best possible deals to get your business up and running.

Process Your Application

Typically, you can start with the banks – online or at bricks and mortar banks. There also other options available including merchant cash advances, short-term loans, term loans and lines of credit. Whatever option you choose, remember to get your proverbial ducks in a row so that your chances of being approved are greater than your chances of being denied.

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