Our top three Business Loan Experts used their 85 years of collective lending experience to unlock the secrets of what every business owner should know about getting their loan approved.
1) Historical information counts. Does past behavior predict the future? When applying for a loan, it most certainly can. Typically, loan committees, loan officers, banks and/or the SBA will review historic earnings to support the loan request. If a company is a startup with no historic al data, never fear. Startups can still be approved for loan requests by building a solid business plan and following the next four tips.
2) Be able to articulate the future. More and more, the lenders like the SBA want to dig a bit deeper into a business’ future. Business owners need to have an updated business plan that articulates how the business is expected to grow, how many employees are needed and does the company have the cash flow to support growth. Projections with assumptions are surprisingly uncommon but very useful when pulling together documentation for the business loan.
3) Stay on top of your personal finances. Personal credit does matter. The way you handle your personal debt can be an indicator of how you will handle your business debt.
4) Build a strong team of advisors. Most small businesses do not have the capacity for on staff accountants, legal experts, marketing specialists, etc. But making some strategic investments, like contracting with a CPA who understands the line of business and can complete tax returns, can make all the difference to a loan committee reviewing the loan request.
5) Gather all your documents. Go through your checklist (located here on the final page of the SBA loan application). Understanding your financials will help you understand what your business can afford to do.
-Contributors- Andrew Young, Angela Howard and Michael Crowe.
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