Are you seeking financing for your small business? Do you need funding to expand, launch a new product, or perhaps hire additional staff? Obtaining funding can be one of the most challenging parts of running a small business. Many banks will only lend to large, established companies, and banks who do lend to small businesses often have high standards. If you plan on pursuing a traditional small business loan, you'll need to find the right lender and make sure your application is as strong as it can possibly be. Here are a few tips to bolster your chances of getting approved:
Find the right lender. Your first instinct may be to apply for a loan at the institution where you do your regular business banking. That may be a good idea, as your relationship with the bank could help your chances. However, if your bank is a large national institution, they may offer little or no lending to small businesses. Many large banks focus on lending to large corporate clients.
You may want to visit some smaller banks in your area. In particular, look at community banks and credit unions. They often don't get large lending clients, so they're willing to lend to small businesses. Also, contact the Small Business Administration and ask for a list of banks in your area that offer SBA loans.
Get your house in order. You don't want to give the underwriter any reason to deny your loan or question your suitability. If you're missing documents or if some of your numbers don't make sense, the underwriter could ask you to make corrections, or he or she could deny the loan outright. Don't give them that opportunity. Ask you lender for a detailed list of what information and documents they'll need. Then gather that documentation and present it as a neatly organized package. Err on the side of providing too much information rather than too little.
Also, look for things that you can offer to secure the loan. Are you comfortable making a personal guarantee? Does your business have assets you could offer as collateral? If so, make sure you make that known to the lender.
Tell your story. Lenders look far beyond numbers when approving a loan. You can improve your odds by telling them the story of your business and how the loan will help you grow. Show them why you're successful and how you've established yourself in your market. Tell them about your leadership and how you've grown the company. If they see a compelling story of growth and profitability, they may be more likely to look past credit issues or financial problems.
For more information, visit a lender that offers business loans. They can help guide you through the application process.
Share1 March 2016
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