Tips for Acing Your New Business Loan Application
Are you interested in getting a business loan but don’t know how to start? You’re certainly not alone. 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 you can have other alternatives that let you get through barriers of tradition. But here’s the overall picture:
Dealing with Banks
First off, remember that the bank actually wants to approve you. 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 number one thing they need to get out of the way – that you actually have the ability to 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:
> income statements and balance sheets for the last two years;
> latest financial statements;
> a business plan that shows the path your business is taking; and
> tax returns and bank account records to back your income statements.
Modern Accounting Software
If you have access to modern accounting software, you need not produce any of the mentioned papers. The program will instead produce all the information necessary to business startup loans, such as growth trends and forecasts, as well as income and expense reports. 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 Your Business Case
As we said previously, those who are interested in getting small business startup loans need to convince the bank that their business is worth the gamble. To do this, you have to understand how bank people think. What is risky for them, for example? What makes them think an argument is strong or weak? If you know the answers to these questions, you will be able to frame your business story in a way to boosts your odds of obtaining the loan. It’s good to consult an accountant for this.
Quick Small Business Startup 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.