Can I get a loan only with my idea?

An excellent idea and good planning are essential tools for a successful business. Unfortunately, an idea, no matter how good, is not enough to raise the capital needed to start a business or improve an already existing business.

The popular belief that an idea and a business plan provide the necessary financing is a myth. Usually, entrepreneurs are not approved for bank financing only based on their idea and their potential to start a business.

The business plan serves as a guide for the average investor. However, it invests in you, in your business, in the product you want to sell, in the people who work for and with you.

Business financing debunked

  • Venture Capital is a valid option: Unfortunately, this form of financing is not valid for the majority of companies. The majority of companies that are lucky enough to work with venture capital are companies with a very good reputation and well-known owners. If you want to open a neighborhood bookstore, venture capital is not the best for you.
  • Bank financing is excellent for start-ups: In fact, banks rarely invest in start-ups; banks prefer well-established companies.
  • The business plan guarantees a lender: As mentioned earlier, no matter how good your business plan is, it does not guarantee you getting financing. As an owner, you must convince the lender that you are the right person to turn your idea into a successful business.

That said, you still need a good idea and a great business plan; it’s just that you can not just rely on your business plan and your idea. Your idea will be the cornerstone of the business, the starting point. The business plan will be the ultimate guide for you and your investor. This will tell you how much money you need and for what task. Everyone you approach will want to see your plan.

Where to find the money?

Where you are looking for money and where you will find it will depend entirely on the type of your business. Each company has its own needs and as an entrepreneur, it’s up to you to find the right financing for your project. Small business owners looking for some funding to increase their visibility should not be targeting the same lenders as a growing technology company.

Loans for SMEs

The Canadian government (see their website ) is working with financial institutions to provide SMEs with the financing they need. To qualify, you must be either an SME or a start-up and have an annual gross income less than or equal to $ 10 million.

Your funding will still be provided by a traditional financial institution (banks, credit union, etc.). So you will have to submit your business plan directly to the institution and the decision to approve or reject will belong to them.

Ordinary bank loans

If loans for SMEs are not what you are looking for, then you can opt for a regular loan. This type of loan is not guaranteed by the government, which gives you greater financial freedom. To get this loan, you just have to do business with your bank and present them your business plan.

Alternative creditors

Alternative creditors are gaining more and more popularity among entrepreneurs with some financial difficulties or a less brilliant history. Usually, these lenders do not place much importance on your credit score and credit history. These lenders instead analyze the growth potential of your business and want to help you achieve your goals.

The process is rather fast, which makes it very attractive for entrepreneurs who are looking for quick financing to seize an opportunity or to cope with an emergency.

Cash advance payments

For businesses that have a lot of day-to-day credit card transactions, cash advance payments can be a valid option. Convenience stores, restaurants, and other small businesses can benefit greatly from these Hpsakuse cash advances. Usually, the creditor lends money based on the volume of transactions you make.

The terms of this type of loan differ from one lender to another, but payment is usually done through a daily percentage on the volume of your transactions.

choose the correct option

We understand that choosing the right financing can be a difficult task, especially since it will have a direct impact on you and your business. But, as the owner, you are in the best position to make that decision. In fact, no matter what you choose, make sure you feel comfortable with that choice.

What does your credit rating really mean

Knowing where your credit is on the credit score scale is important. Depending on your rating and ranking, you may receive lower interest rates and be more likely to be approved for payday loans @ There are three credit reporting agencies – Experian, Equifax, and Transunion. Each has its own approach to determining ratings, but overall, they provide the same results. In general, companies look at a credit report overall and across the credit score. This makes your credit rating more understandable.

Credit ratings and their meanings

Usually, lenders use a scorecard to determine where a credit rating is and what rates they may receive.

  • Excellent (Scores 780+) – Individuals with a rate of 780 or higher will benefit from the best interest rates on the market. They will usually always be approved for a loan.
  • Very good (scores 720-779) – This is considered almost perfect and individuals with a rate in this range will always enjoy some of the best rates available.
  • Average (scores 680-719) – Although this is still a good range, individuals with this score will receive slightly higher interest rates than those with odds above them.
  • According to Equifax, at the end of 2012, the average national credit score was 696.
  • Bad (scores 580-679) – Scores in this range indicate that the person is high risk. It can be difficult to get loans and, if approved, they will pay a lot in terms of interest.
  • Very low (scores of 579 or less) – Scores in this range are rarely approved for anything, but the credit can be repaired.

Factors Affecting a Credit Rating

Generally, there are five factors that determine the calculation of a credit score, but three of them account for 81% of the overall total. These factors are:

Recent Credit (30%) – Indicates when the credit was verified and shows that the consumer has requested more credit. This indicates a risk for those who already have a large amount of debt.

Payment History (28%) – This is determined by the repayments they made to lenders or creditors. This, therefore, reflects the frequency of payments on their loans or bills on time.

Usage (23%) – This shows the amount of debt that the consumer’s way of managing it.

Credit repair

The most important thing to know is that credit can get better or worse. This makes the payment of bills or loans even more important for someone who would like to apply for new loans or mortgages in the future. In addition, lowering overall debt will significantly increase a credit rating.