5 Ways to Improve Your Chances of Getting a Small Business Loan
Small business owners looking for capital may want to spend some time preparing for the process; I have been preparing thousand of loans application, both as mortgage (3 years) and now as business loan broker_ Chief financial officer at Peach Capital, I’m in position to tell that this preparation can make all the difference in whether a company receives the funding they desire. As business owner, I can say that prepared small businesses going through the financing process have a better chance of gaining loan approval. To help businesses in their journey,I offer the following tips to small business owners.
- Provide detailed information — Don’t skimp on specifics with banks. Show exactly how you will use the requested funds and how much you need to accomplish your goals. Lenders appreciate attention to detail and preparedness when it comes to the facts. For example, if you are looking to purchase a new piece of equipment, provide quotes on the exact costs, how much capital you need to facilitate this purchase and specifically how the new equipment will help grow your business.
- Be prepared to share your financial information – Provide your lender with all the financial background on your company, future growth plans, and often your personal financial information. By offering this information up front, it will allow a bank to gain an understanding of your complete financial situation and it will ultimately reduce the time to finalize your loan package. The more information you have to illustrate that you’ve run your business well in the past gives banks the confidence they need to invest in you for the future. The more information you provide, the easier it will be for your loan officer to get your loan approved. Banks are in business to loan money, so this is a win-win for both sides.
- The more the merrier – Research and make a list of five potential lenders and start at your first choice. If approved for a loan, continue to shop the market for the best rate if you have time. If declined, keep trying! Too often, mostly due to lack of time, business owners stop at the first or second negative response. Be prepared to seek a loan from a minimum of five lenders. And learn from your mistakes. If one lender turns you down for one reason or another, learn from this feedback and adjust your approach with the next lender.
- Seek out Small Business Administration assistance — SBA lenders are a great resource for small businesses. There are counselors who can assist you with the loan process. Additionally, the more you know about the products that are available for your unique situation, the better your chances are at securing a yes response to your application. Visit www.sba.gov, to learn more about SBA loans.
- Think local— There are all types of lending institutions, but community lenders are often best equipped to appreciate how your company works within the local business environment. Community lenders’ key insights can range from local market dynamics, to cash flow timing issues, and they frequently understand your ability to achieve success. It is always important when working with a local lender to highlight your involvement outside of work within the community. This is a great demonstration of your commitment to the community where you both live and work.
P.S. As always, please take a minute to leave a comment on my blog. I want it to be a conversation rather than a rant from my soapbox.
P.P.S. And don’t forget my constant reminder: we’re still lending! Call 800-722-5956/email: firstname.lastname@example.org/fax 877-624-4455/live chat with us on the next wealth-creating commercial property ownership loan you know about