Tips for Acing Your New Business Loan Application
Planning on getting a business loan but daunted by the process? There are many like you. There’s so much paperwork and figure-crunching in the picture. And then you need to wait for the bank or lender’s decision. The good news is, we just got progressive when it comes to the whole system. Now you can have other alternatives that let you get through barriers of tradition. But this is the general picture:
Dealing with Banks
First and foremost, keep in mind that the bank actually wants to give you a loan. They do want your application to succeed. After all, one of their major revenue sources is the interest you’ll pay. But of course, that’s the first thing they want to be absolutely sure of – that you have the capacity to pay. Presenting a business case that is convincing enough for them to approve your application, is your main job when it comes to getting a business loan.
As you probably know, applying for new business loans comes with a number of requirements, such as:
> income statements and balance sheets over the past 24 months;
> recent financial statements;
> a business plan discussing where your business is going; and
> bank account records and tax returns to support your income statements.
Modern Accounting Software
If you use modern accounting software, you don’t have to pull up any of the mentioned documents. All information crucial to applications for business startup loans, such as growth trends, income and expense records, and forecasts, will be provided by the software. And if you use software that has been configured with bank feeds (this means your income and expenditure information will be accessible right from your business account/s), the loan officer will find your information even more reliable.
Presenting a Good Business CAse
As mentioned previously, getting approved for small business startup loans requires convincing the bank that the business is worth a bet. To convince them, you have to be aware of how bank people think. How do they assess risk, for instance? What makes arguments strong or weak for them? Once you know the answers to such questions, you can tell your business story in a way that makes them more likely to approve your loan application. It’s good to consult an accountant for this.
Immediate Small Business Startup Loans
Finally, there’s a new and very welcome type of lender nowadays that checks applications online and offers immediate access to capital. The main idea is, these lenders are more into what’s in store for your business, and less into what happened to it in the past. For example, they don’t have to check your credit score. Instead, they will use some analytical tools and start studying your business, and whether or not it will likely succeed.