How to Obtain a Small Business Loan
Entrepreneurship has been steadily rising, noting a 4 percent increase in 2008. Unfortunately, with the current state of the economy, many financial institutions are being more selective when providing funding to businesses, and there often aren’t enough loan options to go around. To ensure you have the highest chance of success in applying for a loan, there are some easy steps to follow to give you an advantage over your competition.
How to Obtain a Small Business Loan
By following these steps carefully, you can determine which loan options are ideal for your business and tailor your application to provide you the highest likelihood of approval.
1. Assess your qualifications. Prior to determining the best loan option for you, it’s important to consider your unique qualifications as an applicant. Consider your annual business revenue, your credit history, the amount of collateral you have to provide, the size of your business, and the region your business is located in. All of these are factors that will determine which loan options you can qualify for and how much money you’ll be eligible to receive.
2. Assess your need. Determine how much money you require and a reasonable timeline with which you can pay it back. Additionally, determine what you need to spend the money on the most so you can find loan options that cater to your specific goals as a company.
3. Review the qualification requirements from a variety of lenders. Compare and contrast the necessary qualifying factors of each loan option available to you. This will help you narrow your scope and create a more manageable list of available lenders. Whereas commercial loans require fastidious financial documentation and an impeccable financial history, business cash advances can provide funding to those with weaker financial histories. Understanding the qualification requirements among lenders can help you to determine the best loan option available to you.
4. Gather the necessary documentation. The necessary documentation will depend on the loan option you seek. For commercial lending and government lending, you’ll need to provide up to three years of business financials, your credit history, bank statements, and tax returns. For some loan options, you’ll need to be prepared to offer collateral that is equal to the amount being loaned. Additionally, for private equity investors or revenue-based investors, you need to provide a solid business proposal that details how you intend to utilize the funding and how and when projected returns will be created.
5. Consider other options. After reviewing the above steps, if you’re unsure whether you’ll qualify for traditional loan options, consider the other funding methods available to you. Business cash advance agencies cater to entrepreneurs who are ineligible for other options and can get you ample funding without the need for credit checks, collateral, or business proposals.
Business owners require substantial investment capital in order to succeed in their prospective industries. With the fierce competition among small businesses, those that succeed are the ones that take financial risks when needed and are able to satisfactorily invest in the future of their company. With the right funding, you can grow your business and continually tailor your business model to the needs and wants of consumers, enabling you to exceed your competition and grow as a business. For modern business funding solutions, contact Credibly.