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Starting your own business requires money, and most people don’t have that kind of money lying around. It takes planning to finance your start-up, but if you know what is required from you, the process can be streamlined to give you peace of mind. Below are some tips on what you need to know before you start your business loan application.
Tip 1: Open a business banking account
When you start your business, you’ll first need to get a bank account for your business. A business bank account is specifically catered for business transactions. Opening a business bank account is much easier nowadays as most financial service providers have an option to apply online.
Tip 2: Keep your credit score in good standing
Most financial service providers look at your business credit score to see whether you are a trustworthy borrower. If you don’t pay your accounts on time or short pay, it can lessen your chances to qualify for a business loan. Building a good business credit score will help you in the future when you need financial aid for your business.
Tip 3: Determine how much you need and what you need it for
Before you apply for your business loan, you should first take a hard look at your finances and determine what you can afford and why you need to get a business loan. This will help you to make the right decision when applying for a business loan.
Tip 4: Don’t over-borrow
Make sure that you only borrow what you can afford to pay back. If you over-borrow you may end up damaging your business credit score if your business cannot manage to make the monthly repayments.
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This information is intended for general information purposes only and does not constitute legal advice.