Starting and managing a company has never been easy, which means that many business owners need to rely on funding from third parties to get the capital they need to grow their companies – or just keep them afloat. If you’re looking for business financing, it can be hard to know where to start, so here are ten tips on how to hire a business financer that will help your business grow with no regrets!
1) Do your research
The first step is to know what you want and what you need from a business financer. The second step is to do research on all of your options. You should speak with people who have used financing in the past, attend industry events, and reach out to people in the field. There are many ways to find potential financiers including searching online or asking a professional that you trust.
2) Check their credentials
When you’re in need of a business financer, it’s important to do your research and make sure you know who you’re dealing with. A good first step is checking their credentials. Does the person have experience in lending? Do they have a license? Have they taken on other companies like yours before? Checking their credentials can be a great way to streamline the process and make sure you’re getting what you need.
3) Ask around
Asking around is one of the best ways to find a good business financer. Talk with other entrepreneurs who have had experience with financing and see if they would recommend any specific people. You can also ask around within your local community or at networking events. If you’re not sure who you should talk to, consider asking a banker or an accountant. These professionals may be able to help you connect with someone who can provide funding for your start-up.
4) See if they have experience in your industry
Experience is one of the most important aspects when looking for a new investor. While there are many potential investors, some may not have experience with your industry, or even understand what you do. It’s crucial that they have a background in whatever it is you’re trying to accomplish so that they can give you sound advice and resources on how to continue growing.
5) Check their success rate
Look at their success rate. Find out how many of their clients have been able to repay their loans and have not defaulted on them. The lower this percentage, the higher chance that they are lending money to people who are not able or willing to pay it back.
6) Make sure they’re trustworthy
Finding the right person with whom you can trust your company’s future is paramount. To ensure that you hire a trustworthy person, ask them these questions:
- What do you like about working with small business owners?
- What are some of the things that make it hard to work with small business owners?
- What is one thing that you learned from a previous experience that would be valuable for me to know about before we start working together?
7) See if they’re available when you need them
- Consider their level of experience. Find out if they have any experience in the industry you’re in or have worked with companies similar to yours.
- Consider their level of expertise. Does this person specialize in a specific area of finance? If so, will they be able to handle all aspects of your company’s finances?
- Compare quotes from multiple sources.
8) Get a referral
If you have a friend or family member who has successfully secured a loan from a reputable lending institution, ask them to refer you. Not only will they be more likely to answer any questions you may have, but they may be able to provide insider information on what the lender is looking for in terms of documentation and credit scores.
9) Compare pricing
Business owners often have a difficult time choosing between getting an SBA loan or an alternative lender. Both offer financing and will help you get started, but they do come with different levels of risk. The level of risk that you choose depends on how much equity in your business you are willing to give up. If you are looking for more than $250,000 in financing, then an alternative lender might be the best option.
10) Interview them
Interviewing a potential business financer is an excellent way to get in touch with their personality and style. See how they respond to you, what kind of questions they ask, and how they communicate. When you find someone who really clicks with you, trust that feeling.