Tips for Acing Your New Business Loan Application
Are you interested in getting a business loan but don’t know how to start? You’re not the only one. There’s tons of paperwork and computations involved. And then you have to wait for the bank’s decision. The good news is, we just got progressive when it comes to the whole system. Now you have options that allow you to break many of the traditional barriers. But this is the general picture:
Dealing with Banks
First, take note that the bank would actually want you to get a loan. They do want your application to succeed. Besides, the interest you’ll pay is one of the major ways they make money. But of course, that’s also the first thing they need to be clear on – that you can actually pay. Your main task when getting a business loan is to present a good business case and prove that approving your loan is a good move.
As you may already know, there are several requirements for applicants of new business loans, including:
> balance sheets and income statements of the most recent two years;
> latest financial statements;
> a business plan that shows the path your business is taking; and
> tax returns and bank accounts as backup for your income statements.
Modern Accounting Software
If you use modern accounting software, you don’t have to pull up any of the mentioned documents. All information crucial to applications for business startup loans, such as growth trends, income and expense records, and forecasts, will be provided by the software. And if you use software that has been configured with bank feeds (this means your income and expenditure information will be accessible right from your business account/s), the loan officer will find your information even more reliable.
Presenting Your Business Case
As we mentioned earlier, those who want their applications for small business startup loans approved, should be able to convince the bank that their business is a good bet. To do this, you have to understand how bank people think. How do they assess risk, for instance? What makes arguments strong or weak for them? If you know the answers to these questions, you will be able to frame your business story in a way to boosts your odds of obtaining the loan. It’s good to consult an accountant for this.
Quick Small Business Startup Loans
Finally, there’s a new and very welcome type of lender nowadays that checks applications online and offers immediate access to capital. The main idea is, these lenders are more into what’s in store for your business, and less into what happened to it in the past. For example, they won’t look into your credit score. Instead, they will use some analytical tools and start studying your business, and whether or not it will likely succeed.
More ideas: go