When it comes to securing a business loan for your real estate agency, things can get tricky. There are a lot of factors that might be impacting your ability to get approved without you knowing! Here are five things that might be hurting your ability to secure that crucial loan.
Poor Cash Flow
Financial lenders want to see that you’ve got steady cash flow; it reassures them that you’ll be able to pay back what you owe. If you’re not selling enough property and your sales aren’t enough to fund your business expenses, you’ll probably have a harder time securing that loan.
Lenders will look at your business credit when considering you, and they may not be inclined to work with you if your score is low or has multiple derogatory marks. Fortunately, you can take steps to start improving your credit score right now, and derogatory marks will fall off with time.
Lack of Experience
Credit card, vehicle or house lenders want to know that they’re loaning to people who know what they’re doing. If your agency is fairly new or you don’t have much experience running a business, lenders might hesitate to grant you funding. Having solid professional references to vouch for you can sometimes help in this situation.
Applications for small business loans include tons of paperwork, and it’s easy to miss or incorrectly fill out some of the pages. When you’ve finished your application, go back through it carefully to make sure you’ve done it all correctly. Real estate experts such as Stefan Soloviev can verify that it’s a good idea to go over your application with a financial advisor, too.
Poor Business Model
Lenders will look at your business model when considering you for a loan. If your concept doesn’t look promising enough to bring in your projected income and you haven’t moved enough property to back your claims, they’ll most likely deny you a loan. If that happens, you can go back to the drawing board and consider making changes that might improve your model.
When trying to secure a real estate loan, remember: keep trying. If you don’t succeed the first time, analyze what went wrong and make adjustments. You can also try applying with multiple financial institutions; some lenders may have fewer restrictions on new business owners or individuals struggling to build good credit. With the right tactics, getting a loan is within your power.