Applying for a small business loan can be a daunting and discouraging process — which, given the statistics on approval rates, is understandable.
1. Gather and organize all your business documents
Regardless of the type of loan you’re looking for, there are a number of documents you should have in place before applying for a traditional loan from a small business lender.
Here are the documents you should have at the ready:
- Written business plan
- Profit and loss statements and projections
- Business and personal credit scores
- Tax return documents
- Bank statements
- Copies of relevant legal documents including articles of incorporation, contracts, leases, and any licenses and permits needed to operate
- Even if you’re not in the market for an SBA loan, you can check the Small Business Administration’s site for a full small business loan checklist.
2. Know how you’re going to use the money
Just saying “I need money to grow my business,” is not going to cut it. Before you decide to go for small business financing, make sure you know exactly what you’re going to use it for.
A specific idea about where you’re going to put your funds to work — and how that use will help your business grow in the long and short term — is something small business lenders want to see. Getting clarity here will also help you analyze factors like interest rates and loan terms, so you can land on the right loan for your business.
3. Create a rock-solid business plan and register your business name
Lenders want to see that you’ve thought carefully about your growth and operations strategy. That’s why a rock-solid business plan is such a crucial document in the small-business financing process. Lenders may look to your business plan to help them determine whether or not you’ll soon be in a position to pay them back.
You also want to make sure that you’ve registered your business name properly. You can’t get a small business loan without registering your business.
4. Make sure you have good credit
Bad credit makes it harder to get a small business loan. To many lenders, your credit score is a top factor in their decision on whether to accept or deny your loan application.
Generally, banks may look at both personal and business credit scores — so make sure that in both arenas, you’re making payments on time, spending well under your credit limit, and keeping accounts open. Also, if you have no credit history, that could prove problematic for some lenders.
5. Have a handle on your cash flow
Cash flow issues are a top pain point for small businesses, especially those with large, upfront operational costs and equipment. But if you’re applying for a small business loan, you want to make sure you’re consistently staying above water with your cash flow.
This is especially important in light of your debt-service coverage ratio (DSCR), something many lenders look at when deciding whether or not to approve your application. Essentially, a DSCR is the ratio of cash a business has readily available for servicing its debt. It’s a mathematical equation that lets lenders know whether or not your business will be able to pay them back (which is, of course, the top-of-mind question).
Ready to apply for your funding?
All clients go through a discovery process with one of our trained staff. The discovery process is where we ask you a series of questions and give you the honest truth about your file. Our staff will figure out all the different financing options for you. Each client’s situation is different. Clients are in different industries and have different credit scores, gross sales, revenue and profit margins. They make and show different amounts of income depending on corporate structure, equity and fluctuations in cash flow.
Business funding is not a one size fits all model. This is what our trained staff is here to determine. Our capital comes from hundreds of different sources (Banks, wholesalers, crowdfunders, private lenders and investment groups) and they all have different underwriting criteria.
Call us today to find out how we can help your business get the funding it needs! 1-888-294-2584
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Financial restraints have been a complaint for many of the dreamers, limiting themselves to their immediate funds. There is an alternative. If you have the dreams and decent credit, Small Business Loans and No Doc Loans are available to you. Our goal is to provide you with the knowledge you need and the resources available to make your dream a reality. Give us a call – we have the education and the perspective to help you obtain the loans you need for your small business. Visit our website or give us a call to find out what financial backing is available to make your business soar!
Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.
Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584