How long do you need the loan? It is always advisable to create a business plan in which you can estimate the period during which you will need the additional financial support.
8. Write (or update) your business plan A detailed business plan is the primary vehicle for selling your vision and financial strength to the lender. A solid business plan presents the history of your company, from its beginnings to its relationship with the market. It illustrates your company’s mission and roadmap to achieve goals. Financial reports provide a comprehensive analysis of what you have already accomplished and your plans for the future. Lenders believe that businesses that present a comprehensive business plan have a better chance of being successful and repaying their loan on time.
9. Gather the documents and apply for your loan Business loans often require extensive paperwork. Loans from banks, credit unions, or online lenders require additional information about you and your business. Get ready with the documents.
10. Wait and reassess (if necessary) Business loan processing times depend on the type of loan and the amount requested. While some can take weeks or months to get approved and funded, others will get back to you in a day or two.
If you’re turned down, find out the reason for the unapproved loan and improve your chances next time. There are often options that are better suited to you and your business. Remember that every time you apply for credit, a difficult credit application is being made, and each application can lower your credit score by a few points.
CONCLUSION The best way to improve your chances of getting a business loan is to spend time doing the legwork before you apply. If you need help with your credit or cash flow, take steps to develop those areas before approaching banks.
Once you’re sure of where you stand, look into business loans to find the right lender for you and your business.