Applying for a business loan is a major step towards bringing your idea to life or continuing to run your business however you want. Whatever your reason is for applying for a loan, you want to ensure it goes smoothly.
To help improve your chances of getting approved for a business loan, here is what you should do.
Check out our fast and hassle-free quick business loans
Know What Documents to Bring
Many businesses apply for loans without procuring the necessary documents beforehand. You can go through the process, but when it comes time to submit your request, your application will be denied or delayed if you don’t have the necessary documents.
All business loans are revenue driven and the business owner’s personal credit often plays a role in the underwriters’ decision-making process.
If the business is well established with a credit history of some financings, such as equipment loans and equipment financing, it does not require a personal credit check.
However, business loans, merchants cash advances and lines of credit always require a personal credit check, even though they are revenue-driven for the most part.
It’s good to know your approximate personal credit rating to discuss the appropriate options available with your loan advisor.
If you’ve had a bankruptcy within the last year, your options may be far more limited, regardless of credit score. Underwriters look at credit history as a whole versus a simple score. If you think your credit isn’t good enough, or if you’ve had a bankruptcy within the last year, we still have options available that you may qualify for.
Depending on your loan amount and the type of business financing you’re requesting, some lenders may ask for a complete business revenue report including all profits and losses for the last year. Although most lenders will only ask for bank statements for the last three months, except on larger loan amounts where tax returns may be requested.
When applying for a business loan from a bank, you should be mostly concerned with their time consuming process which requires far more documents than most alternative business loan providers. If you’re short on time, and in need of quick access to a business loan, consider requesting a loan online.
As mentioned above, lenders will want to see your business’s bank statements. At the very least, you’ll be asked to provide three months’ worth of statements. Different lenders and different types of loans will have slightly different requirements.
Time in Business
No matter what type of lender you go through or what loan you’re applying for, you’re going to be asked how long you’ve been in business. Naturally, lenders will favor those that have been in business longer.
Most lenders will require your business to be at least two years old. There are some lenders that will make allowances for newer businesses, but you should be aware that you’ll be much more limited with what types of loans you can take out.
While newer businesses can take out loans, it’ll be more challenging, and you won’t have nearly as many options.
Proof of Additional Collateral
No lender wants to approve someone who is a high risk, so you’ll be asked to provide proof of collateral. If your business is unable to pay back the loan, the collateral will be taken instead. In most cases, acceptable collateral is equipment or other sellable assets.
Additionally, some lenders may ask you to provide personal collateral as the business owner. To inquire about unsecured financing take a look at MCA.
Having laid out all the proof and documentation often needed by lenders, you’d be relieved to know that online loans like ours are a relatively more straightforward process involving much lesser documentation.
With GetMoney.com, all credit types are welcome, and you can get started with just 3 bank statements. We have business loans and financings that focus on business revenue vs. your personal credit history. Even borrowers with bad credit can be considered for the right business or equipment financing. We aim to serve all business owners through a hassle-free process with no upfront fees.
When you apply for a business loan, it’s good to be prepared. Even though everyone has different requirements, it’s good to have your business license, a copy of the last three bank statements, and a copy of the quote if you’re buying equipment ready to submit right away for faster processing.
If you need a fast and hassle-free business loan, call us today and experience our streamlined process. It’s simple, fast, and smart.