I recently read an article, written by a fairly large SMB issues blogger, aimed at helping businesses understand the reasons that their small business loan applications may have been rejected by one provider or bank or another. Most of these were fairly standard concerns about credit score or proof of business history. However, this blog pointed out one potential reason that stood out to me: organization.
Now, no responsible lender is reasonably going to come into your store, see a cluttered shelf or two, and reject your loan application outright. However, an organized business reflects an organized management mindset – from the inventory to the sales records, to the tax records and financial statements, to the shelves, desks or counters you work from.
At Merchant Advance, we’ve always thought that applying for a small business loan should be easy. Reams of paperwork and proof are not required – though having well-organized records puts your business ahead of the curve when it comes to the speed and accuracy with which you can apply for a loan or merchant advance funding.
Click the link to find an awesome chart, sourced from the folks at Dummies.com (the ones with the ubiquitous yellow books), provides a comprehensive base of categories from which to build a records organization system. One study found that the average person wastes over 4 hours per week searching for papers: to combat this, you can condense your records digitally, or archive information that exists outside of a critical date range in your company’s history. From a records management perspective, less is often more: choose one system that works for you and your employees, and stick with it. The results will prove themselves over time: when it comes time to provide key data for applications such as those for a small business loan or merchant advance, you will be ready to provide the right info with little or no downtime.
Organized financial management will help you succeed when it comes to small business loan applications. By taking steps to monitor and improve your business’ cash flow, separating business and personal finances by opening dedicated accounts and cards, and finding options for critical services like web hosting, payment processing, banking and telecommunications/internet that aren’t overcharging you for the services you need, you will see an improvement in bottom line profitability that small business loan providers will notice and factor into their assessments.
Beyond just using technology to make your business more efficient, use outside resources that may help elevate your business and take it to the next level. Consider reaching out to local small business development centres for assistance and networking opportunities.
With the right organized mindset, your financial history, important documents and other elements that represent the “best face” of your business will all be in order when it comes time to apply for a small business loan.