Four Ways To Help Get Your Business Loan Approved
Most every business needs a little financial help now and then. You may be experiencing a slow season, need to boost your inventory in anticipation of the holiday, or other high-volume season, or be having trouble collecting from your customers. Taking out a short term small business loan is one good way to weather these lean periods and still have the funds you need to meet payroll and operate your business.
Like personal loans, banks and other lenders want to assure themselves that your business is healthy enough to be able to pay back your loan in a timely fashion. To do this, they look at your financial records and your business and marketing plan. Fortunately, there are several things you can do to help ensure that the bank officials see your business in a positive light and are likely to approve your loan.
How to boost your chances of getting your business loan approved
1. Check your credit report. Businesses, like individuals, have credit reports that show how good they are at paying their bills on time and managing their credit. Like personal credit reports, these files can have mistakes in them that can hurt your company's changes of securing a loan. Make sure to pull your report and clear up any errors before you start applying for a loan.
2. Get your financial data in order. In general, a lender wants to see that a business has been profitable for at least three years before it is willing to lend the business money. In addition, messy and incomplete financial documents will almost certainly cause your application to be declined.
3. Seek out a local lender. A local bank is more likely to approve your loan than a national lender. That's because the loan officer knows the local financial climate, may already be familiar with your business and has an incentive to keep the bank's money flowing within the community.
4. Tell a compelling story. Simply turning in your paperwork is rarely enough to get your loan approved, especially if your business hasn't been profitable for each of the last four years. Make sure that the lender understands your vision, your future plans for your business and why you need the money.
While there is no absolute guarantee that your business loan will be approved, you can improve your odds dramatically by getting your financial data in order and checking your credit report before you apply, opting for a local lender and making sure to tell your company's story in a compelling way. For more information, talk to a professional like State Bank of Cross Plains.