In the small business report from May 2024, the U.S. Chamber of Commerce highlighted an interesting trend—more than half of new entrepreneurs are aged 55 and above. As the World Health Organization predicts, the population of people over 60 will nearly double by 2050. This shift, along with Baby Boomers leaving or facing challenges in the workforce, suggests the percentage of older entrepreneurs will keep climbing.
However, it’s not all smooth sailing. Recent figures show a worrying 53% rise in business bankruptcies compared to last year. This highlights the need for Boomers to set up solid financial practices and ensure their businesses are geared for growth and credibility when applying for loans.
Richard Gusmano, the founder and CEO of BCCUSA, has spent nearly two decades helping entrepreneurs navigate the business world and meet banking requirements. He shares insights on the growing number of older entrepreneurs and offers tips on making your business more attractive for loan approval.
Why More Boomers Are Becoming Entrepreneurs
Several factors explain why more people in this age group are starting businesses. Many have gathered lots of experience over the years, making them well-suited for entrepreneurship. Also, with a focus on healthy living, people are living longer and opting not to retire in the traditional sense.
The current economic climate also plays a role. As companies restructure or downsize, many Boomers find themselves out of the workforce. Instead of looking for new jobs, they choose to use their skills to start businesses, contributing to both economic growth and innovation. They seek new challenges and opportunities to generate income by becoming entrepreneurs and staying active.
Tips for Making Your Business More Attractive for Loan Approval
Starting a business is one thing, but securing funding to grow it is another. Here are some key tips to boost your chances of getting a loan.
Understand Your Financials
The first step to making your company more appealing for a loan is knowing your financial situation. Keep your records like balance sheets, income statements, and cash flow statements up to date. These documents show lenders how your business is doing financially.
Put together a business plan that outlines your goals, strategies, market analysis, and financial forecasts. Explain clearly how you’ll use the loan and plan to pay it back. A detailed plan indicates you have a solid vision and strategy.
Don’t neglect your business credit scores, as they heavily influence lending decisions. Make sure your credit reports are accurate, fix any mistakes, and pay your bills on time to reduce debt. A strong credit history builds your credibility with lenders.
Build Relationships with Lenders
Creating connections with lenders can help secure financing. Start by opening a business account with a bank and staying in contact with your banker. Attend networking events and join business groups to meet potential lenders.
If you’re an established business with at least two years behind you, consider working with a business credit consultant like BCCUSA. They use their wide network to match you with suitable lenders, improving your chances of loan approval. Working with such a consultant can simplify the loan application process.
Showcase Your Experience and Skills
Lenders need to see that you can effectively manage a business. Highlight your background, expertise, and achievements in your loan application. If you have a management team, point out their qualifications too. Demonstrating you have a capable team can give lenders confidence in your business’s potential.
Take Your Time on Loan Applications
The loan application process can be detailed and time-consuming. Be ready to provide comprehensive information about your business, including financial statements, tax returns, and legal documents.
Be honest in your application and prepared to answer any questions from the lender. Proper preparation and attention to detail can greatly affect your loan application’s success.
Hope for Boomer Business Owners
The growing number of Baby Boomer entrepreneurs showcases their resilience and adaptability. As they enter the business world, it’s crucial to understand the financial side of managing a business and securing loan approval for ongoing growth.
Starting a business can be both challenging and rewarding, no matter your age. With the right preparation and expertise, Boomers can leverage their experience to build successful ventures and contribute to the economy.
