4 steps to better approvals
When applying for financing, there are several factors at play. Virtually every detail about your business is considered in a holistic manner. Out of all these many elements that are taken into account, there are top 4 factors to better approvals. You should keep them in mind when being considered for funding.
1. Years in Business
From an investment standpoint, the longer your business has been active, the greater the probability that it will remain so because it has proven to withstand changing conditions. So if your business has been around for a good number of years, your chances for approval are much higher.
2. Transaction History
A good history of positive business bank statements is a great sign of a healthy business. It gives the impression of a business that is able to pay its bills and not venturing in the red. Zero negative days and sufficient funds on your bank statements usually mean that you would likely meet the repayment schedule.
3. Industry Type
Some industries are seen as riskier than others when it comes to providing financing. This can be due to seasonal impacts, fads, profit margins, and overall success statistics of a particular business type. Due to various restrictions adult entertainment, bail bonds, cannabis growers, talent agencies, investment firms, call centers may not get approved. This does not mean that they cannot acquire funding, but only that the pool of willing investors shrinks, which results in fewer options.
4. Average Daily Balance
Cash flow is the lifeblood of any business. Therefore, investors like to see a healthy continuous amount of funds in the business bank account. A higher average daily balance indicates that a business is bringing in more than it spends on a daily basis. This is a terrific indicator showing a growing business. On average, a daily balance of $500 or less significantly decreases your chances of approval for financing.