Obtaining a business loan can turn into a real nightmare for entrepreneurs. The main reason is that banks usually force entrepreneurs to jump hoops before even considering approving their loans. A lot of people simply give up at some point and look for alternative sources of funding.
Moreover, entrepreneurs are usually uninformed about what it takes to get a business loan. Therefore, even if they manage to secure one, it turns out that the payout conditions are unfavorable and that the interest rates are through the roof.
So, what can you do in such situations? The simple answer is to consult with an accountant before you go to the bank. Accountants are financial experts that are familiar with how the system works and how banks try to hustle people. The advice you can get from an accountant can prove to be invaluable when securing a business loan. With that in mind, here are a few ways accountants can help their clients secure a business loan.
Help you decide on a loan
As mentioned before, accountants are financial experts that know all the ins and outs of the financial system. They can help you determine which type of loan you need, the size of the loan, the payback methods, and whether you even need a loan to begin with.
In a lot of cases, entrepreneurs who run into financial difficulties with their business believe that a business loan will take care of their problems. However, taking a loan can result in additional debt, which creates more problems. Accountants are also financial advisors; they can analyze your situation and determine the root of the problem.
You may be having cash flow issues that can be solved with factoring instead of taking a loan. Therefore, consulting with an accountant before you go to the bank is of vital importance. That way, you’re basically making sure that you won’t make any mistakes.
Help you understand the requirements
Banks tend to be very picky when it comes to approving business loans. That being said, they will oftentimes have absurd requirements for borrowers. An accountant can help you familiarize yourself with those requirements so that you’re able to meet all of them and secure a business loan.
For example, banks take a close look at your credit score. If they don’t like what they see, they will consider you a liability and, therefore, deny you for a loan or charge you with insanely high interest rates.
An accountant can point this out and provide you with advice on how to improve your credit rating so that banks will be more willing to give you a loan with more suitable conditions. Your accountant can point out every other requirement a bank may demand from you. They can also help you prepare yourself, so you won’t get side hustled into opting for a loan you don’t really need.
Help you prepare all the necessary documentation
Going to the bank to get a loan means you’ll need the right documentations that you’ll present to the bank clerk. If you don’t have everything that they request from you, they’ll just send you away. An accountant can help you prepare the necessary documentation in advance.
However, make sure you work with a local accountant who knows what local banks require from you. For instance, if you’re going to a bank in Sydney, you should consult with one of the financial advisors Sydney has to offer. They can tell you precisely what you need to obtain a business loan. That said, your accountant can also help you sort all the documentation in order so that you have more chances of being approved for a loan.
For example, an accountant can ensure that your financial statements are properly audited before you present them to the bank. In addition, they can help you put together collateral and help you come up with a background for the loan application process. Last but not least, an accountant can advise you on how to negotiate the best terms for your loan, so you don’t get blindsided by the bank.
Help you chose the right bank
Although all banks function and operate in a similar way, not every bank is the same. Some may have more favorable loan conditions than others, and an accountant will help you out with choosing the right one. What’s unfortunate is that when banks provide benefits in one area, they tend to be less favorable in the others.
So, the key is to find the ideal balance between the pros and cons of taking a business loan at a specific bank. Your accountant will present you with several options and help you decide on the best one for you and your business. Their bank recommendation depends on the type of business you run and the type of loan you need.
An accountant is a very valuable asset to your business. They are not just proficient in managing books, but they are also financial experts who can provide you with valuable advice that will not only help you secure a business loan but also help you manage your business finances more efficiently.