Tips: Securing Financing

Don't Borrow Money to Get out of Debt
Many people view debt-consolidation loans as a way of helping them get out of debt. However, consolidation loans simply combine debt. You could end up losing everything because you?ve tied it all up in one loan. If you must borrow, see if a friend or family member can lend you money, since the interest rates should be low or nonexistent.

Invest Your Own Money to Improve Loan Odds
Investing your own money is a great way to get banks to take you seriously. Lenders typically like to see owners have at least a 25 percent equity stake in the businesses they finance. When you put your own money on the line, banks assume that you will work hard to make the business a success.

Avoid Prepayment Penalties in Business Loans
If all goes according to plan, your business will soon be flourishing, and you may have the funds to pay down your loan more quickly. But if your loan agreement contains a prepayment penalty clause, you may end up paying significantly more than the original loan amount. Some lenders include prepayment penalties to prevent you from refinancing a high-interest loan.