BANGALORE: Some start-up ideas are creative enough to make billions and some are innovative enough to change the conventional mindset. But, all start-up face great challenges in figuring out how to finance their business. There may be options available in the market for a new business but the fact is that only small percent of start-up becomes successful in attracting fund from venture capitalists and angel investor.

One of the available funding options for a start-up is loan from commercial bank but it can be a tough nut to crack because banks give loan to those with a proven track record. Here are 5 steps which can helps a start-up secure a loan as compiled by ‘Tweak Your Biz’.

1. Figure out a business plan

A business plan is an essential roadmap for getting a commercial loan. This project the company future plan and outline the route a start-up intends to take to grow revenue. A clear business plan increases the probability of getting a loan manifold because it describe and provide information to bank on what your start-up do, what differentiate this business from others, and the market your business serve.

 This will also provide a start-up with a chance to explain the competitive advantages that will make business successful such as its location, expert personnel, and efficient operations.

2. Know your limitation

Start-up should be well prepared before for limitation on financial help. Once a start-up knows what they want, they need to work out your limitations for finance. They should be fully clear about the need of the money, will it require up-front or on a part basis.

Start- up should pre-decide decide the maximum repayment of the loan, which can be easily affordable for them and also helps bank in fixing the start-up limit. It should also make sure that if the bank requires collateral, what assets it has to offer?

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