9 mistakes you make borrowing money for your business

9 mistakes you make when asking for a credit for your business

According to the general director of the SOFIPO Finmex, Ernesto Gomez, the main mistakes of entrepreneurs applying for funding are: informality, lack of seriousness to build business accounting, not revising interest rates, taking more credit that they can’t pay and mixing business finances with personal.

"The time when an entrepreneur has greater need for financing is when he or she puts the project on track, but you need to know that the resource you require (...) is not yours and you have to pay an interest rate" he said.

If the idea is to get a bank loan also must be backed by a guarantee, this is based in function of the resources that you require, so you should be clear, and the time within which you will pay, the expert said.

"The entrepreneur must have the feet firmly planted on earth, good business idea is not the only reason to be creditworthy", he said.

He stressed that the mistakes to avoid when looking for a bank loan are:

1. Not knowing where you stand.
Identify the business cycle in which is your company, what is your financial need, and why do you need the resources.

2. Don’t settle for one credit solution
Study them and analyze which meets your needs.

3. Not checking the term.
Verify that the amount you pay to the bank is more than 30 percent of your operating profit.

4. Choose a loan with a longer term than the time in which you contemplate recover your investment.

5. Flippancy.
Deliver your documentation in a timely manner.

6. Losing sight of the exchange rate.

7. Mixing business with personal credit.

8. Not establish your business.
Placed on a formal scheme will help companies to be reliable for financial institutions.

9. Paying until the last day.
Avoid penalties and interest.

Applying for a loan that exceeds your income and not see the conditions are failures to avoid if you want your business to access credit.

MVP Business Strategy gives financial advice to identify the proper way to cover the costs created for the creation and/or modification of your company.

Source: http://www.cnnexpansion.com/emprendedores/2014/10/02/9-errores-al-pedir-un-credito-para-tu-negocio


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