Small Business Loan Application Tips
Taking out a business loan to grow your business can be a difficult task when you take a look at the amount of paperwork involved and the criteria you have to meet to be approved for a business loan. The business loan application process can be more manageable if you plan ahead and know what to look for when applying for a business loan.
Here are few tips before you prepare to apply for a small business loan
- Prepare your business plan
- Evaluate the financial health of your business
- Search for a small-business lender
- Prepare your paperwork
1. Prepare your business plan
Before you apply for a business loan, make sure your business really needs the money. This is why creating a business plan can help give you a good idea of where your business is headed and whether a business loan could help you take your business to the next level.
Your business plan will help you determine what kind of business loan you want and how much you want to borrow for your business expansion or growth. A business loan to finance regular operations may have different terms and eligibility than a micro loan (generally less than $50,000) or a loan to buy more equipment or real estate for expansion.
Peach Capital Funding offers advice and step-by-step instructions to help you create a business plan. Contact us for help with preparing your business plan so you can get approved for a business loan for the maximum amount possible.
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2. Evaluate the health of your business
Before your business loan application can be approved for a loan, the lender needs to know you have the ability to pay the loan back.
Lenders will review your personal credit history and business. Before you apply for a loan, request your personal credit reports and try to clean up any errors.
If you are applying for a business loan for your existing business, lenders will want to see that you have cash flow to be able to pay back the business loan. If it’s a new business, lenders may consider your experience within the industry.
3. Best small-business lender
It will be tough to qualify for a business loan from a traditional bank. The SBA helps lenders give business loans to small businesses that otherwise wouldn’t qualify for small business financing. These business loans are guaranteed by the SBA, so lenders may offer financing that they would have considered too risky to loan traditionally.
4. Prepare your business loan documents
Putting together a business loan application can be extremely time consuming. If you’re applying for an SBA or another type of business loan, you will need to fill out paperwork for both the lender and the SBA to review.
You’ll need to provide a business plan, cash flow projections, and projected financial statements to provide proof of ability to pay back the small business loan.
The more lenders know about you and your business, the better they can assess your situation and determine whether you qualify for the business loan you want.
Peach Capital Funding
The business loan application process can be much easier if you think carefully about your business plan. If your small business loan application is rejected, don’t give up. Ask Peach Capital Funding for feedback and review your application for opportunities to improve it. Be prepared to apply for business loans from several different lenders with our help.
If you are struggling with your business loan application, a Peach Capital small business mentor will be able to help. Simply contact us today!