Getting a loan for a business is not very easy even if you take out with a direct lender. The result revealed by a survey conducted in 2018 among 250,000 businesses demonstrated that 46% of entrepreneurs successfully secure a business loan while 54% face rejection due to one reason and the other. However, the bad game starts as soon as you get money in your account. A large number of entrepreneurs struggle to pay off small business loans on time.
Entrepreneurs fail to pay off the loan on time because of dynamic nature of the business. It is not surprising if your next month sales drop or you fail to receive funds from your clients that they owed you. If something goes against your plan, you face more difficulty paying off the debt. In the survey, people expressed the following concerns when they take out business loans:
|Interest rates and fees are high||31%|
|Bank turned down the application||10%|
|People were not aware of these loans||26%|
|People do not know how to find them||16%|
|Their availability may not be for a long time||11%|
Now that you have come to know that entrepreneurs come up with several concerns when it comes to taking out a business loan. The significant reasons for borrowing money for a business is increasing working capital, expanding a business, relocating, hiring staff, buying equipment and inventory and so on. Having analysed the trend in demand for unsecured business loans, the financial adviser of British Lenders has put forth some useful tips to help entrepreneurs who need money for recruitment.
This is a prominent reason why entrepreneurs take out a business loan. Many companies feel that they would not grow if they did not have a team of talented professionals. Recruitment process is very complex and time-consuming. If you have a start-up or you do not want your money going down the drain, you have to be very smart with your resources.
The more money you have, the sooner you will be able to pay back your business loan. Here are some tips that can help you quickly fulfil vacancies in your company:
Make an attractive job advertisement
A candidate will apply to your company if you clearly tell them who you are, what you are looking for, location of your business, salary, company benefits, key requirements, job description and the way to apply for a particular position. Some recruiters do not give details about the company and salary. This discourages a large number of skilled people from applying for the post. These are basic details which you must mention in your advertisement. Give a brief introduction to your business along with a URL of your company’s website.
Use referral schemes and offer incentives
Completely relying on people to respond to your job advert cannot be a good idea especially when you cannot afford wasting time and money. You should spur on your employees to recommend people they know and offer them incentives in exchange. Such kind of deals can help you quickly fill in the vacancy.
Provide training and mention it in a job advert
Employees want on-the-job training to hone their skills. This is the best way to attract a large number of applicants. Even if you provide workshops, it will be enough to retain talented employees in your company for a very long time. A small investment in training sessions can benefit you in the long run.
Since you are going to pay interest on top of the principal and unsecured business loans come with higher interest rates than secured one, you should carefully plan your recruitment policy. The longer it takes, the more money you will spend on it, and the more difficulty you will face to pay off the business loan.