First-time business owners intent on obtaining funding face a number of risks. Learning to safely navigate past these dangers is critical for the success and growth of your company. Here are some of the most common financing issues to watch out for.

Being Overly Impatient

One of the basic financing issues to avoid is a lack of patience. Funding your business is a process that has several important stages. If you try to rush through the various steps you will become frustrated and possibly make costly mistakes.

Lack of Preparation

You need to approach lenders in a professional manner. Create a comprehensive business plan that you can present with your application. Be sure the plan includes a description of your company’s source of income so that lenders clearly comprehend your ability to pay them back.

Misunderstanding the Requirements of Lenders

Before you invest the time and effort in applying to lenders, find out their criteria for accepting applicants. If you approach the wrong lenders, you will only waste time and experience frustration.

Failure to Research the Reputation of Lenders

Prior to working with lenders, conduct research to be sure that they are fair and reputable. Some lenders extensively advertise their services but then are deceptive to business owners that respond. Look to the Better Business Bureau, the website of your local Secretary of State, and other sources for reviews and complaints.

Not Approaching Multiple Lenders

If you only apply to one lender, you have no choice but to accept the terms that lender offers. Instead, approach several lenders and compare their terms before you make a final decision.

Not Counting the Cost

When you consider acquiring funding for your company, be sure to assess the consequences of failure. If your business’s cash flow is unsteady and you are not sure of your ability to make loan payments, it might be best to wait. Failure to pay back what you have borrowed can result in the loss of whatever collateral is involved, including your home.

For more advice on business financing issues, contact Rustwood Capital.