Friday, January 10, 2020

9 things to do to maximize your chances of getting a small business loan

9 things to do to maximize your chances of getting a small business loan

To obtain approval for your small business loan application, you must be able to meet the established loan criteria. Some organizations are more risk averse than others and, therefore, will have more stringent criteria.

To greatly increase your chances of a successful financing request, you must submit the following information:

1. The reason for the loan. The lender will look for something that fits the normal range and experience of your business. The quantity can cover several items, so you must cover each one.

2. for example, $ 10,000 for a 5-year term, payable quarterly).

3. Details of how you will pay the amount borrowed.

4. Security details that you can offer to the lender. This will act as a comfort to the lender. If you are not prepared to put some aspect of security, why should they?

5. You must include your business plan that will answer essential questions related to management capabilities, information about the market in which you operate. What type of business you are in, etc.

6. Financial statements at 3 years. You must submit quality financial information of your accounting software, preferably signed by your accountant or tax advisor.

7. Last set of management accounts. Again produced from its accounting software.

8. Reports of seniority of accounts receivable (debtors) and accounts payable (creditors).

9. Main financial statements. - Especially necessary if some form of security is necessary.

You should take the time to practice presenting your case to the bank or the lender to solve any technical problem. Practice with your colleagues and family (you never know, they could be so impressed that they will invest or lend!). It may be useful to interpret the role of the lender and ask as many pointed questions as possible. The longer you take, the better your chances will be. (But remember, don't fall into the paralysis trap of the analysis!)