Tips for Getting an Approval when Applying for a Small Business Loan

Biphoo

3 Oct 2017

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Getting an Approval for a Small Business Loan

Let’s face it, for most small businesses, the loan process ranks right up there with root canals, bee stings, and paper cuts. In other words: it’s painful. It doesn’t have to be. It’s no secret that the past few years have been hard on small businesses in a number of ways, and the struggle to access sufficient credit has only accentuated these difficulties. The good news is that there has been an uptick in small business lending recently, and while securing funds is easier than it was a few years ago, it is still a very demanding process. By taking appropriate steps to prepare in advance, small business owners can dramatically increase their chances of Securing Loan Approval.

Companies that are looking to grow often use a loan’s proceeds to help fund increased working capital, to purchase/upgrade equipment, hire additional employees or produce more goods to sell. Marc Scheipe, Chief Financial Officer, Sage North America, and a former small business owner, offers the following Tips to Small Businesses Loan that are seeking funds to support their growth.

1. Provide detailed information. Don’t skimp on specifics with banks. Show exactly how you will use the requested funds and how much you need to accomplish your goals. Lenders appreciate attention to detail and preparedness when it comes to the facts. For example, if you are looking to purchase a new piece of equipment, provide quotes on the exact costs, how much capital you need to facilitate this purchase and specifically how the new equipment will help grow your business.

2. Be prepared to share your financial information – all of it. Provide your lender with all the financial background on your company, future growth plans, and often your personal financial information. By offering this information up front, it will allow a bank to gain an understanding of your complete financial situation and it will ultimately reduce the time to finalize your Small Business Loan package. The more information you have to illustrate that you’ve run your business well in the past gives banks the confidence they need to invest in you for the future. The more information you provide, the easier it will be for your loan officer to get your loan approved. Banks are in business to loan money, so this is a win-win for both sides.

3. The more the merrier. Research and make a list of 5 potential lenders and start at your first choice. If Approved for Small Business Loan, continue to shop the market for the best rate if you have time. If declined, keep trying! Too often, mostly due to lack of time, business owners stop at the first or second negative response. Be prepared to seek a loan from a minimum of 5 lenders. And learn from your mistakes. If one lender turns you down for one reason or another, learn from this feedback and adjust your approach with the next lender.

4. Seek out SBA assistance. SBA Lenders are a great resource for small businesses. There are counselors who can assist you with the Small Business Loan Process. Additionally, the more you know about the products that are available for your unique situation, the better your chances are at securing a “yes” response to your application.

5. Think local. There are all types of lending institutions, but community lenders are often best equipped to appreciate how your company works within the local business environment. Community lenders’ key insights can range from local market dynamics, to cash flow timing issues, and they frequently understand your ability to achieve success. It is always important when working with a local lender to highlight your involvement outside of work within the community. This is a great demonstration of your commitment to the community where you both live and work.

Biphoo

3 Oct 2017

919 Views