Upgrading your IT infrastructure is just about the perfect way to breathe new life into your business operations. That said, the latest hardware doesn’t come cheap, and it’s easy to fall behind you competitors if you don’t have the cash. Fortunately, there are various outside lenders who’d be willing to finance your project — here’s what you need to do to win their hearts (or checks, rather).
Improve Your Credit
A good credit background goes a long way when you’re seeking financing. Lenders see you as a responsible borrower who faithfully pays their dues. This not only makes it easier to qualify, but you’re also going to be charged less in interest.
Do note that most lenders will look at your business as well as personal credit; keep it tidy on both ends by settling bills in time. If there are any blemishes on your credit reports, you’ll be better off explaining them upfront than having the lender discover on their own.
Get Your Books in Order
Even with a stellar credit history, financiers will want to know how healthy your company is. Having your books in order also shows that the business is run in an organized, professional manner.
On that note, it’s probably a good idea to enlist an accountant if you don’t have one already. They’ll help you prepare whatever documents lenders might request, from income statements to balance sheets and tax returns. Most importantly, though, a good accountant will ensure your books are accurate and up-to-date.
Have a Plan
Any business loan application must be backed up by a rock-solid plan, or else it’s not going to sail through. Think of it as a pitch to potential investors; no one will put their money on the line unless they’re sure the investment will fetch good returns. In the same vein, lenders will have more confidence bankrolling your hardware upgrade once you show how it’ll improve your organisation’s bottom line.
Don’t just rely on theory here. Have a well-detailed plan that highlights projected revenue flows, along with specific benefits that the new infrastructure will bring. Also make sure to demonstrate how your company will have enough cash flow to cover the repayments plus operational expenses.
Explore Multiple Options
Like you shouldn’t put your eggs in one basket, you cannot afford to pitch your hopes on a single lender when seeking funding. According to Dana from Equipment Loans Online, be sure to consider the following avenues when getting computer finance:
– SBA Loans: Government-guaranteed SBA funding is popular with businesses that can’t get financing from other sources; find out if yours qualifies.
– Online Lenders: Loans from online lenders often carry cheaper interest rates, and eligibility requirements aren’t as strict as is the case with traditional banks.
– Credit Unions: You might also want to check with your local credit union if banks are giving you a hard time.
– Vendor Financing: Hardware manufacturers also provide equipment on credit, allowing you pay back the purchase cost in instalments. The only catch is that you’ll have to stick to computers made by that particular company.
Read the Fine Print
Do your homework properly before agreeing to any financing arrangement. Do the math to see how much you’ll end up repaying, and see if there are any penalties you might incur along the way. Make sure you’ve picked the best possible deal before signing the dotted line.