By: Chris at TheStartUpEasyButton.com
If so, it’s important to know that many lenders require businesses to have two years of strong financials before being eligible for a loan. This is obviously a sticking point for new business owners. The following are some tips on finding the best capital sources that work with new grooming salon owners.
Knowing which lenders are friendly to new pet care businesses will save you a lot of time and frustration. Applying for a business loan without research can result in you being denied and getting a negative ding on your credit report, making it more difficult to get approved by a different lender in the future. You need to avoid rushing into it and start by doing your research.
First, you need to figure out which lenders are friendly to startup businesses. There is a very specific group of lenders who are focused on helping new entrepreneurs launch businesses and generate jobs for the local community. These are the lenders you want to target.
1. Understanding the business loan industry.
Community lenders that are friendly to startup businesses come in a variety of forms, but some of the most common ones are:
• Community Development Financial Institutions
• Microlenders
• Community Advantage Lenders
2. Researching the lender.
Once you identify a lender that is startup friendly you should review their website, so you can skip over questions that are clearly answered on the site. If their website doesn’t clearly state it, you will want to ask about the following:
• minimum credit score
• loan amount ranges
• borrower’s out-of-pocket investment requirements
• collateral and co-signer requirements
• business plan requirements
• repayment terms
Generally, these lenders have more flexibility for credit scores, equity injections, and collateral requirements, but they will often require more paperwork to ensure you are a safe investment.
3. Making a good first impression.
During your initial meeting with the lender, your goal is to simply convey that you are serious about starting a business and applying for a loan. You will explain that you are still conducting research, but you want to learn more about the lender’s requirements and process.
To help prepare for the meeting it’s good if you have completed a cursory level of research on opening a grooming salon.
One of the quickest ways to gather and layout your initial research is by using a one-page business plan. By using this layout, you can quickly create a high-level overview of your business to share with your lender. (Click here to obtain a one-page business plan template to help you get started.)
4. Tailoring your business plan.
After your initial meeting with the lender, it’s time to gather the remaining information that you will need to feel confident about starting and running your salon. To help with this step you will complete a full business plan. (Note: The one-page business plan that you completed will become the executive summary section of the full business plan.) The full business plan will force you to take a deeper look into how your business will run. Additionally, most lenders will require it as part of the loan application package.
So, it’s important that you get the business plan right. While there are multiple strategies for completing a business plan, you need to select a layout that accentuates your strengths. Your business plan needs to clearly convey that you have the ability to manage the business and repay the loan.
5. Using every opportunity to become a familiar face.
In addition to getting the business plan right, make a point of getting to know your lender. Become a familiar face because familiarity breeds trust and goodwill. Take time to ask questions about the process and get their help as you go along. As human beings, we’re naturally inclined to support those we know and trust, those with whom we’ve invested our time. By becoming a familiar face, you’re not just another applicant; you’re someone they believe in and want to see succeed.
If you would like more tips on creating a business plan and finding top lenders to open a grooming salon, check out my website www.thestartupeasybutton.com/pet-care-business or email me at chris@thestartupeasybutton.com
https://www.animalbehaviorcollege.com/blog/paw-prints/thinking-about-opening-a-grooming-salon/
