As business professionals, one of your primary objectives is to obtain your business growth. Good news, expanding your small business is no longer impossible today. As there are many attainable funding resources discovered as time progress. In expanding your business, you will go through a series of financial assistance that includes business loans, cash advance against credit card income, purchase equipment loans, equipment lease loans, and mortgage commercial loan. To start off, you have to come up with business loans to acquire greater opportunities and development in the long run.
Banks are the primary provider of loans to either small or large-scale businesses. Also, the growth in population of lending firms shows that the right set of circumstances are getting in the way for certified business owners/corporations. Here are few important factors to cross out on the list when applying for business loans.
- Keep your company’s credibility.
During loan review process, the bank shall recognize the debtor’s credibility. Thus, you have to be prepared in all aspects of investigation. Given that credibility is associated with character, you have to ask yourself if your business is free of any form of negative records and if it is worthy to obtain credit application.
- Provide credit score/history.
Lenders will determine your payback capacity through your business credit score. Your capability to make regular payments will let them know whether your business is creditworthy or not. Remember that credit history plays the most important component in loan review operation. The stronger the credit history is, the more chances of getting the lender’s approval or getting a larger amount of credit.
- Create a killer business plan.
Applying for loans is just the same as applying for a job. Your counterpart for an excellent resume would be a powerful business plan. Of course, most lenders are interested to see how your business can grow with their provided loan. A killer business plan can be a useful instrument to obtain a credit approval.
- State the company’s annual revenue.
Some lending companies are very particular with the company’s annual revenue. This element is another basis to look at in reviewing the applicant’s qualifications. Expect that the larger amount of revenue can be a plus point for your business to be qualified for a larger amount of credit.
- Consider age of business.
Most banks may typically prioritize those companies that have been established for a year or two. Being in the industry for years can denote a positive stance of your business which is given more attention by lenders. Otherwise, you can consider applying for a start-up loan if your business has been established in less than a year.
- Prepare your collateral.
In business loans, failure to obtain a credit return happens for some debtors. In response to this, lenders require all debtors, big and small, to provide a collateral that would serve as a replacement for the unsettled credit. Collateral is any form of tangible assets that you are willing to give up in securing your business loan application, whether it be a personal/business real estate, business accounts, and other business properties like equipments/machineries.
- Name your personal income.
Most lenders do not only consider the business annual revenue but also the owner’s personal income. To be qualified, your total personal income must be 1.25% greater than your expenses.
Author: Sarah Contreras
Sarah holds a bachelor’s degree in Communication with expertise in certain fields like advertising and media marketing. She currently works as a web content contributor for Marketlend, the first peer-to-peer lender in Australia. When she’s not writing, she spends most of her precious time thinking of what to write next.