A business loan can be an effective way to grow your business. The additional capital can help you achieve many things, such as expanding your business, replenishing your inventory, maintaining cash flow, maintaining and adding equipment, using it as an emergency fund, and more.
However, in order to obtain a business loan, there are a few things you need to prepare. These are mainly necessary to convince the lenders that your business is healthy and able to repay the loans on time.
The following are 6 steps you need to take.
1. Make a well-thought-out business plan
A business plan should contain a complete profile of your business, starting from what your business does, your business model is, your yearly revenue, yearly profits, and other things needed to convince lenders that your business is a healthy one.
In addition, you can also show upcoming opportunities you will be able to secure, or projections of your company’s performance if you manage to get the loan. For example, you could include the business opportunities/trends you can leverage in your target market, the projected profit in a given period of time, and so on.
2. Watch your credit score
Credit score is the score given by the lender (creditor) to the recipient of the loan (debtor). This credit score is an indication of your ability repay loans. This score will also affect the maximum amount you can borrow. Try not to have unpaid debt, because this will affect your loan application process.
3. Ask for advice from other people who have applied for a capital loan
You may need to ask for opinions from other businesspeople who have previously had success with business loans. They are people who have been in your position before – asking for their opinion is the right move.
Ask specific things, for example, what are the items you need to prepare, tips for getting a loan application accepted, how to make a good business plan, and so on.
4. Determine the right time to borrow
The best time to apply for a capital loan is when you have a real need for it, in order to grow your business, for example, when your business is about to open a new branch, or when your business is performing at its best and you want to capture more market share.
This will further convince loan lenders that your business is indeed able to repay the loan they provide.
5. Have assets you can use as collateral
The requirement for collateral is common in lending and borrowing. There are three main functions of collateral:
- Securing loans from the risk of default
- Giving the lender the ability to get repaid with the assets put up as collateral if you fail to repay the loan
- As your motivation or impetus in paying off your loans.
6. Calculate how much capital you need
With careful business planning, you would already know how much capital you need and what you will use it for. Lenders generally have their own assessment of what is the maximum amount you can borrow, so it will be best if you have already done your calculations internally before you start borrowing.
Grow your business with the help of a business loan
When your business is ready to grow, and you’ve made sure that you’ve met most of the requirements for a loan, it’s time to apply for the loan.
There are many providers of business loans in Indonesia. However, it’s important that you look for trustworthy lenders that are certified and licensed by the authorities.
For example, Xendit works with our licensed partners to provide business loans that are not only fast and flexible, but gives you peace of mind. Our partners are licensed by the Financial Service Authority – Otoritas Jasa Keuanagan (OJK), and as such their business activities are strictly supervised by the OJK.
Find out more about the available business loans provided by our licensed partners for Xendit users.
About Xendit
Xendit is a financial technology company that provides payment solutions and simplifies the payment process for business in Indonesia, the Philippines, and Southeast Asia, from SMEs and e-commerce startups to large enterprises. Amidst the fragmented payment landscape in Southeast Asia, Xendit enables businesses to accept payment from direct debit, virtual accounts, credit and debit card, e-wallets, retail outlets, and online installments.
For many businesses, accepting payment online is new territory, but we’re here to help. We helped 1000s of businesses come online and we’d love to help you too.
Find out more about Xendit, or sign up to try our dashboard!
