Getting business loans has always been tough particularly for small businesses. Some financial firms may still provide you with funding while you are getting off the ground but when you are into a running business phase, getting loans can become tougher. Well, at least that is what most people think!
Getting business loans has actually become easier compared to other forms of funding, however; you just need to know the right steps and a bit of research to get your hands on the best financial service provider to secure a loan for your running business. No matter how big or small your endeavor may be.
That is why we are going to discuss the simple and convenient steps to get your loan request approved by loan servicers to make it an easy ride for you. Let’s get started…
- Have all your paperwork complete and reviewed before applying- this is a very crucial step that must be taken by every business owner before they intend to apply for a loan. Often businesses apply for loans without having the required documents ready for executing the process satisfyingly. This is also the reason why processing gets delayed and loans get rejected. You must keep all documentation handy before decide to apply. This will save you a lot of headaches. According to Intuit “Traditional banks require more documentation–generally speaking–than online lenders”
- Statements & records must be clear – keeping clear business records is paramount for proper day to day operations and it is also important when applying for a business loan. According to Quick Loans Direct “a business simply needs to have been operational for more than 6 months and show at least $10,000 per month gross monthly deposits” – If applying through a bank, you may be asked for 12 months of history or more.
- Build strong business plans- any financial service provider will love to see strategized and fully vetted business plans before providing you with the funding requested. So, make solid business plans which you would follow in the coming years to make your endeavor a successful one. SBA.gov recommends that your business plan includes an executive summary, company description, organization and management structure, service or product, marketing and sales summary, funding request, financial projections and an appendix for resumes and permits.
- Plan on providing strong collateral if necessary – Collateral is simply an asset used in order to secure a loan. While most lenders offer unsecured loans, make sure you have a plan in case you are asked for collateral in order to fund your loan. According to Eric Markowitz, Senior reporter for INC – “A viable asset to use as collateral will have a title of ownership, and banks will only lend if they can get a title back”
You will find many obstacles while operating and growing your business. One of those major obstacles will undoubtedly be funding. If used wisely, debt can help you maximize your business thrive. Being organized, and having proper plans in place will take you a long way when trying to overcome these obstacles.
Remember a journey of a thousand miles begins with a single step!