Getting a Business Loan: A Quick Overview on How to Prepare for the Application Process
Website design By BotEap.comIt’s no secret that business loans are not easy to obtain, especially for smaller ones with no or bad credit. However, there are a variety of options available, and once you decide which solution is right for you, you can start preparing. Getting a business loan can help your business grow, expand, improve marketing efforts, fund new research and product development, etc.
Website design By BotEap.comIs your business solvent? Ultimately, lenders make the decision whether or not to grant a loan based on the risk profile and credit history of the borrower. They will look at factors such as:
Website design By BotEap.com• Credit report and score
Website design By BotEap.com• Assets in the business
Website design By BotEap.com• Any outstanding loans and cash flow
Website design By BotEap.com• Your investors
Website design By BotEap.com• Years in business
Website design By BotEap.com• Financial statements
Website design By BotEap.comIf you are just starting out or if your business does not have the best credit history, it will be more difficult to obtain a loan. You will most likely have to put up something as collateral and have to deal with higher interest rates. This is also one of the reasons why you have to submit a list of your assets for lenders to review, so they know what to look for if you end up defaulting on the loan.
Website design By BotEap.comFinancial review when obtaining a business loan
Website design By BotEap.comYour cash flow and outstanding loans will be reviewed to determine if you will actually be able to repay the current loans you are already obligated to repay AND any new loans you may be given (plus interest).
Website design By BotEap.comYou will need to determine for yourself how much money you will need to apply for and why. Every dollar you ask for must be justified. As mentioned above, there are a variety of reasons why businesses are interested in obtaining a business loan, whether it’s to manage day-to-day expenses or to invest in new equipment. You don’t want to just “estimate” how much you’ll need, or you could end up with more debt than necessary or less money than you really need. It will take some time to figure everything out based on detailed cost projections and how much you can afford in monthly payments plus interest.
Website design By BotEap.comIf you haven’t in a while, be sure to check your credit. If your business is already established and you have borrowed money before, you will have a business credit score. If you haven’t been in business very long, check your own personal credit score, as lenders who make loans to start-up businesses will likely want to see it.
Website design By BotEap.comThis information will help you get started with obtaining a business loan. It’s a good idea to visit US Business Funding as the site will help you find the financing you need and has a 95% approval rate.