How to Increase Your Chances of Getting a New Business Loan
Thinking of getting a business loan but clueless about the process? There are many like you. There’s going to be lots of paperwork and computations involved. And then there’s some sweating on the decision of the bank or lender. The good news is, we just got progressive when it comes to the whole system. Now there are alternatives allowing you to break through the conventional barriers. But here’s the overall picture:
Dealing with Banks
First, take note that the bank would actually want you to get 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 also the first thing they need to be clear on – that you can actually pay. Your main task when getting a business loan is to present a good business case and prove that approving your loan is a good move.
As you may already know, there are several requirements for applicants of new business loans, including:
> balance sheets and income statements of the most recent two years;
> latest financial statements;
> a business plan discussing where your business is going; and
> tax returns and bank accounts as backup for your income statements.
Modern Accounting Software
If you have modern accounting software, there’s no need to get any of these documents. The software will produce all information vital to applications for business startup loans, such as income and expense reports, growth patterns, and forecasts. And with your software set up with bank feeds, where your income and data records can be obtained straight from your business account or accounts, the loan approval officer will be more confident that the information is correct.
Presenting a Good Business Story
As mentioned previously, getting approved for small business startup loans requires convincing the bank that the business is worth a bet. This is possible only if you understand the bank people’s perspective. What is risky for them, for example? What are strong and weak arguments for them? Knowing the answers to these questions allows you to tell your business story in ways that increase your chances of getting the loan. It’s good to consult an accountant for this.
Fast Small Business Startup Loans Loans
Lastly, there’s a welcome new type of lender these days that goes over your application online and provides access to capital in an instant. These lenders basically think more about what could happen to your business in the future instead of what had actually happened in the past. For example, they don’t have to check your credit score. Instead, they’ll study your business using analytical tools, and assess whether or not you’re going to be successful.
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