When starting a social enterprise, or any other business, finances are key to the success or failure of your idea. There are several things you can do to improve your chances of getting a business loan, to help you get the funds you need to get your business off the ground. One of those things is a short-term business loans option.
Financial lenders and investors want to know that their money is going towards a business that is viable, sustainable and has the potential to grow.
Having a business plan is the first step and often necessary to show potential investors and lenders that you have taken the steps to understand the needs of your business. You will increase your chances of success, by calculating how much money your business needs, in the short, medium, and long term. Ignoring this step will have serious negative consequences if you fail to estimate the total cost to fund your business.
To help minimise the potential funding pitfalls you will need to do a cash flow projection that will:
- Forecast the operating costs, potential sales and set up costs, for instance vehicles, computers, tools, furniture.
- Your projected cash projection for each month, you can do this monthly, quarterly, and annually, to help you measure your progress.
You can then add at least 10% for potential emergencies. You can add at least another 10% for unexpected costs or events that can negatively affect your cashflow forecast.
Having access to an accelerator loan, can definitely help you during these emergencies, especially if you need a vehicle back on the road, but you need to remember that your credit rating must be in good standing order to be successful. You can also add the accelerator loan to your contingency plan funding, however, you should bear in mind that this can get very expensive if you fail to make the repayments on time.