Getting a small business loan can be a stressful experience at times. Even if you approach it correctly, fill out all the information accurately, and supply all the documents they want, you can get a denial. So many variables are involved in the process that could affect their decision. The good thing about the process, though, no matter who your lender is, is that there are 5 things you can do to improve your odds of getting a small business loan.
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- Business Plan – When you started your business, you should have written a detailed business plan. Hopefully, you have been updating it along the way because you know that the plan is not set in stone. Things happen that demand alterations to the business and how things are run. The lender will want to see this and go through each area with a fine-toothed comb. Ensure everything is accurate and the supporting documents are attached to the back of the plan. The documentation must prove everything before they consider giving you a small business loan.
- Financial Information – Your financial information will be one of the most important things you can provide to the lender. You will want to ensure that the document you have is up to date. Go back a year or two, depending on what they want. Having a professional audit all the information before you hand it over to the lender is a good idea. They will be more likely to believe your numbers if they have been gone through by a professional that has nothing to gain from them.
- Compare – You need to compare offers through an online comparison site. One of the best places to get fair offers is through the iSelect business loans platform. They will make all the comparisons for you and match you with some of their partners that will work with you. Read through all the offers and choose the one that is best for you. Never assume the offer with the cheapest rate is the best option for you. Read through the offers first, and then pick the one with the best rates out of those that work for you.
- Know How Much You Need – The lender will want to know how much you need and what you need it for. You will need to show, through documents and reports, what your plans are for the money if you get it. The lender will evaluate your numbers and your need and decide if the move would improve the profitability of your business. If it does, you will probably get the loan. If not, you will be back to the drawing board.
- Credit – One of the most significant deciding factors for any lender is your credit score and history. They will print out a current report and see how high your number is. The higher the number, the better your risk will be for them. They will also check your information inside the report to see if you stay at your job and have a stable home life. If there is room for improvement on your credit report, fix it before you try and apply for a small business loan.
Applying for a small business loan can be lengthy for you and the lender. Fortunately, the internet has changed that for many people. It is possible to do everything over the online platforms designed to do every step of the process through the use of AI. You can even sign the contract and receive the money through a direct deposit within the same day.
Even if you go for the online route, you will need to show proof of everything you are stating on their application. You may have to scan and send them or take some pictures to send. Either way, follow the tips from above and follow the steps that the lender wants you to follow.