Many small business owners have gone through the process of trying to get business loan financing. And while it can be tedious at times (and lengthy depending on the lender/) there are things you can do and steps you can take to help facilitate the lending process. One of the main steps is fairly simple: be organized. Having everything lined up and ready to go when requested shows the lender that you are reliable and that you are very serious about obtaining financing for your company.
Have everything in order
First off, you want to be sure everything is up to date. Your financials, tax records, all information related to the company needs to be prepared and ready to be presented to the lending institution. A lot of entrepreneurs opt to keep their books to help save money; however, if you don't necessarily have experience with this, or you fall behind, this could just make more of a mess for the business. Consider looking into hiring someone or outsourcing this particular task.
Check your credit
Of course, keeping tabs on your financials is key. The other really important thing when it comes to business loan financing that you want to keep an eye on is your credit. Always be checking your credit; errors can occur, so report those to the credit company when you do see something amiss. As far as maintaining good credit, this is pretty important for any business loan financing. Try and avoid collections, foreclosures, and bankruptcies—these could seriously harm your chances of getting a loan for your business.
Review loan types
You need to review the types of business loan financing available and determine which would work best for your company. Be it a line of credit, an SBA backed loan or a bridge loan, there is a multitude of loan types that accommodate a variety of business needs. Think about what you intend to use the money for. Also, consider what type of business loan financing program you might have the best chance of qualifying for—different lending options have different approval processes.
Show ample cash flow
In determining your ability to pay back a loan, the lender will want to look at your cash flow. As far as what you have coming in versus what is going out—this shows them that indeed there is enough there to cover the cost of repaying the loan in question. You can show the amount of cash flow you have via a financial plan. Include a detailed overview of every single expense and all the cash that comes in.
All lenders are different
In other words, all lenders are going to have their standards and criteria that they will use in reviewing your business loan financing application. Traditional banks may be tougher to work within this capacity—especially if you are a newer, smaller business. Alternative lenders are a great option in this case.
At First Union Lending we pride ourselves on the fact that we do support small businesses—even if they are just getting started. Call today to see how we can help!