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Your business is one of your biggest assets. When the time comes to sell you want the best sale price possible. In this video, we discuss things you need to do today to set yourself up for a successful sale in the future.

Tamara Liebman from Calibrate Legal discusses the importance of using Terms of Trade and what they should contain

for the protection of your business.

Tamara Liebman from Calibrate Legal discusses the importance of using Terms of Trade and what they should contain for the protection of your business.

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Preparing To Buy A Business

Buying a business is a considerable investment and one that comes with its fair share of risk. But getting to be your own boss can be deeply rewarding, too. Here are a few tips from the team at Spinach on preparing to buy a new business.

Think About Your Motivations

Ask yourself: Why do I want to buy a business? Everyone’s probably looked at their boss at some point and thought, ‘I could do this better’. But when you’re the one sitting in the driver’s seat, you begin to realise that things aren’t so simple. Maybe you’ve had enough of your job and want more financial independence. Perhaps you’d love to spend your time doing something you’re really passionate about. Maybe you want to maximise your potential and be more tax efficient. The benefits of owning a business, though, can come at a real cost. When you’re running your own business, you’ll probably end up working longer hours, including on holidays and weekends. That’s why, before you leap such a significant investment, you want to thoroughly understand your motivations for buying a business and whether they’re worth the costs.

Be Sure That You Understand The Business

The single most important thing when it comes to buying your own business is that it must be within your sphere of knowledge. For instance, if you’ve never worked in dentistry, you shouldn’t buy a dentistry business. Your new business needs to be something that you understand inside out. This doesn’t mean that it’s impossible to succeed in an unfamiliar field, but it is unlikely. The people who have made this work have usually been very confident and laboured extremely hard to succeed. In addition, if you already understand your business’ area in detail, a lot of your due diligence is done for you, saving you time and effort!

Learn Basic Accounting, Too

One thing you need when you’re looking at buying a business is a basic understanding of accounting. For instance, you should be able to look back on the month and know whether your gross profit has gone up or down. While getting advice from an accountant is important, you should be able to have a basic understanding of what you’re looking at before you get to buying. If you’re engaging a specialist to assess every business you look at, browsing will quickly become very expensive. Plus, when you outsource your accounting to an external accountant or software like Xero, you won’t understand the business’ books in as much detail as if you were making your own spreadsheet. An understanding of accounting will also help you avoid overpaying for your business.

Make A Business Plan

A business plan is critical if you need a loan for your business. It will help your lender understand the extent of your knowledge and your future goals. Ideally, you’ll want to work with your accountant to make a cash flow forecast, too. Your business plan will explain what you’ll be doing, and your cash flow forecast will show the outcome of your actions. Your business plan shouldn’t just be a one-off. It’s your map for what you’re working on and how you’ll get there, so you should make it an ongoing process, year-in, year-out.

Have Patience

It’s easy to look at a few businesses, lose your patience, and rush into buying a business. But this isn’t an urgent process. It’s more important that everything stacks up. Do you understand the business? Do the numbers add up? Are you paying the right price for it? Are you passionate about the product or the service? Once all of these things are aligned, choosing the right business will be a breeze. Once you’ve decided on a business, then you can get in your lawyer, accountant, and financial advisor to make sure you’ve not missed anything important. Found the right business and need the capital to make the purchase? Spinach can help. We’re a business loan provider who will give your company the financial energy it needs to get growing. To learn more about how we can help you with your dreams of business ownership, get in touch with us at 0800 774 622 today.

During Covid related Lockdown restrictions, Small Business are hit hard and National has a proposal to support those businesses.

Running a small business can sometimes be a huge chore, but organising your finances and business loans doesn’t necessarily have to be. In this article we’re going to look at some of the things that you’ll need in order to secure that loan your new business needs to get off the ground, or to get you the extra funds to take your already existing business to the next level. There are many types of different small business loans for many different businesses but finding what’s going to work for you can be daunting. Just follow our tips and guidelines and you’ll soon be a guru when it comes to small business loans.

Before you Apply:

Have a plan and do your homework

When you’re trying to secure your loan there’s a bit of planning and preparation that you should do in order to optimize your chances of success. First, you’re going to want to start with a solid business plan, to possible lenders this is a key step in whether or not you are worth investing in. One of the best ways to get your plan in order is to have a chat with an accountant or broker. The biggest advantage in doing this is that they have experience applying for loans and know what lenders will be looking for.

When you apply for a loan there will be certain information that will be required, such as; whether the loan will be secured or unsecured, rate of interest and repayment, and potentially you will need projected income of the business. These are all important things to think about and plan before you start your application.

When the bank or lender asks for your business plan you will need to show them the size of the potential opportunity, specifically how the loan will be used, and any key risks that need to be identified as well as how you plan to minimise them. Providing a budget to the lender breaking down how you intend to make repayments, and any profit or loss reports if available are a really good way to show the lender your intentions and reliability with the loan. While not every business loan is secured it is highly likely that you will need to provide some form of security in order to secure larger loans for your business.

Approaching a lender with a solid business plan and targets will help you to get your foot in the door and put you on the right path to success.

Keep on top of your finances

One of the biggest mistakes people make with personal finances is not staying ahead of them or keeping them organised. This is the same with businesses, when banks or other lenders are looking at your application they will assess your credit score as well as reviewing all your financial information. So this is why it’s super important to regularly check your financials and ensure that as a business owner or operator you keep on top of any payments and balances as well ensuring your bank accounts don’t go into unarranged overdrafts. Something that a lot of people are unaware of is that everytime you apply for a loan it will affect your credit score and so applying for lots of loans with various lenders is not always the best option to secure your money.

When Applying:

When you apply for your Small Business Loan there are a few big decisions you will need to make, one of the biggest ones is whether or not you will have a secured loan or unsecured loan. A secured loan is one where you offer something, usually equal to the value of the loan, to the lender as ‘collateral’  and is a great option for people looking for a lower interest rate, higher borrow limit or longer repayment terms, however there can be disadvantages to this type of loan. You will have to provide some ‘assets’ to secure the loan and can potentially risk losing these if you are unable to back the loan. An unsecured loan can offer a safer alternative in some ways such as having no need for any assets to be provided for collateral, however these loans are usually a lot smaller and have much higher interest rates on shorter  repayment terms.

There are a few things the bank will require from you when you submit your application and it’s important to understand what these are; Business Plan, Financials, Creditworthiness, and Security.

So now that we’ve explored the fundamentals of obtaining your small business the only step left is for you to start dreaming of your next business venture. So if you’re looking for a quick and reliable financial solution get in touch with one of our super friendly Spinach teams today for us to discuss ways we can help you today.

Small business loans are an important part of developing your business and enabling growth within your company. Whether you need a small business loan to begin your business or to take it up a notch, small business loans are a great option to finance your business journey. If you’re wondering how exactly do small business loans work, you’ve come to the right place. Here’s how to qualify for a small business loan in six steps.

1. Discover the types of small business loans

Understanding the difference between the types of small business loans available to you is a crucial step in qualifying for one.

There are many different types of small business loans options that vary depending on your particular business needs, the duration of the loan, as well as any specific terms of the loan.

Here at Spinach we offer small business loans to help your business thrive; have a look at our small business loans now and find out how we can best help your business grow to be big and strong.

2. Develop your personal and business credit score

Your personal credit score is valuable to small business lenders as they’ll want to have an indepth look into how well you handle any debt. Personal credit scores represent your ability to repay any personal borrowings. If you haven’t taken out a loan before but use services such as LayBuy, some of them also may  count positively towards your credit score.

The best way to ensuring you have a good personal credit history is to pay bills on time and in full, as well as reporting any potential inaccuracies within your report.

While more developed businesses will have an established business credit score, small businesses still starting out may yet have to confirm one. Business credit scores help in determining how trustworthy a company is when handling money so it’s important to build one up.

3. Be familiar with a lender’s requirements

The minimum requirements and qualifications may vary from lender to lender so it’s important to do some thorough research into which works best for your specific needs and business plan. For example, some lenders may be flexible if you underperform in a certain area if you’ve also overperformed in another.

Here at Spinach, we have cultivated a powerful network of some of the best lenders out there, so you can rest assured that our friendly team of loan brokers will find the best option for your business.

4. Have oragnised financial and legal documents

Keeping your finances and financial reporting in order are crucial parts of being eligible for a business loan. The lender will review both your financial statements as well as your accounting records, though this varies depending on the size of the loan.

It’s important to have your personal and business income tax returns, balance sheet and income statement, as well as your personal and business bank statements among other documents ready to submit to the lender for review.

5. Have a business plan prepared to thrive

One of the most important aspects of your loan application is your business plan. Mainly, how are you going to spend the money? Having a solid business plan that goes into depth about the purpose of the loan as well as the expected increased profits can greatly enhance your likelihood of receiving a small business loan.

You want your business plant to illustrate your cash flows, specifically showing that you will have enough cash flow to be able to afford any ongoing business expenses as well as the loan payments.

The better your business plan, the more confidence the lender can have that your business will be successful, which in turn helps to increase your chances of a successful loan application.

6. Prepare sufficient collateral

Small business loans may require your business to provide collateral. If you’re unsure of what business collateral is, put simply, it’s an asset, such as equipment or real estate, that the lender can either take control of or sell in the case of you not being able to afford the loan payments. While some online lenders won’t require collateral, they may want a personal guarantee, or even a blanket lien on your business assets – which is basically collateral in another form. Each lender has it’s own rules and regulations, so always asks questions if you’re unsure as to what’s necessary.

Contact us now if you’re interested in discussing what’s the next step for you business.