Are you applying for business loans so you can start your own business? Here are five questions to help you make the right decision.

Am I a manager or an entrepreneur?

Entrepreneurs and business managers face almost the same stress when it comes to operating a business. But the two are on opposite sides of the spectrum. They’re different. What is the difference? A manager operates an already-established business. They may not be the people who started it and founded it, but they are the ones who own it at the moment. A manager also has to make sure that the challenges the business faces are handled properly. He also has to hire and retain hard working employees, know the niche their business in focusing on, and be able to improve whatever needs improvement.

An entrepreneur, on the other hand is the one who creates the business. He looks for opportunities that are what the market needs, and converts them into a business plan. A real entrepreneur has the eye to identify opportunities needed in the market and also has the ability to turn those opportunities into businesses.

If you think you can be an affective manager but you don’t have the enthusiasm to start everything from scrap, you might consider franchising. It doesn’t involve the stress of putting up a new business altogether and you have tried and tested marketing methods and business plan to help you get started. But, if you think you have the heart of an entrepreneur, go for it! Get the business loan you need to kick start your business and you will surely beat the odds and succeed in your business.

What is my business model?

Are you putting up a home-based business, an online business or a traditional brick and mortar business that requires a good location?

Create a business budget before you fill up the application loan. It is important to include the annual budget for the upcoming year, based on the current year’s expenses. When making a budget, don’t forget to review you’re the actual expenses versus the budgeted amounts for the past two years of operation to get a good idea of your average income and expenses.

While it is important to make a sales forecast, bear in mind that you cannot guarantee the exact sales volume. So, when coming up with a budget consider your past expenses and profits as well as your realistic sales forecast.

Create a ledger are of your business expenses based on your business model. For example, list fixed expenses such as:

  • administrative expenses
  • marketing expenses
  • payroll
  • rent or mortgage
  • utilities

These amounts are fairly consistent each month regardless of your sales volume. Don’t forget to include the list of variable expenses —or those that fluctuate each month. These include raw materials, inventory and manpower.

Is Self-Employment good for me?

Self-employment is starting your own business- with your own finances, own plan, own budgeting, own everything. Now it also has its own pros and cons like everything else. Being able to own a business may sound quite great at first. But sometimes, it gets tiring when you’re the only one working. Independence is a good thing. You wouldn’t have to rely on anyone else, which minimizes the possibility of small quarrels between co owners.

If ever your business becomes known, you’ll be known as the person who single handedly founded your company. This is actually a great advantage. Imagine, being the only one who founded a huge business? That’s a big deal. To other people, owning a business means being able to control whatever happens in their lives. That’s what we all want right? Freedom to do what we want, say what we want to say.

The search for independence has struck many- this is the reason why the majority now wants to start their own business, for them to have more control over their lives. However, drawbacks exist- such as payoffs.

When you have access to business loans, regardless of your credit score, you will have the freedom to set your goals.  It is also a good motivator to track spending—knowing that when you do, you’ll be an inch closer to the accomplishment of your goals. Finally, it is a good source of emergency funds. You can cover up to 3 months of working expenses in case you hit an unexpected situation.

Financial issues are one of the commons sources of business conflicts-either with business partners, with suppliers or clients. That’s why it is important to have an easy access to business loans to ensure that your business will go on as usual despite financial crises. But, you have to be careful with whom you borrow money from—a good lender would want its clients to move ahead in life. They will not charge hefty interests and unreasonable fees for a small amount, Look for a reputable lender that allows you to grow your business while you can comfortable repay you loan.