Posted on: 10 March 2019
If your business needs a influx of cash, it's time to apply for a small business loan. A loan will give you access to the funds you need to invest in new equipment, expand operations, or take care of other needs related to your business. Here are four steps you need to take to ensure success when you apply for a loan.
Start With a Plan for Your Business
If you're going to be applying for a small business loan, you need to start with a plan. A successful business begins with a solid plan. Your plan needs to include obtainable goals that you have for your business, as well as well-thought out strategies for how to reach those goals. Be sure to play on what your business can provide to the community you plan to serve. It's also important that your business plans include provisions for future growth.
Go Heavy on the Budget Details
Once you have your plan in place, you'll need to sit down and prepare the budget. If you're applying for a loan for an already-established business, it's crucial that your budget include every aspect of your operations. Errors and omissions can lead to a hard and fast denial of your application. Details are particularly important where cash-flow is concerned. When detailing your cash flow, be prepared to provide evidence for any projections you include in your budget.
Make Sure Your Documents are In Order
As soon as you know that you plan to apply for a small business loan, you need to start getting your documents in order. Your lender will want a complete file of all the records pertaining to your business. Your documentation file should include business licenses, tax returns, bank statements, investment portfolios and insurance policies. If you've incorporated your business, or applied for trademark protection, you'll need to include that documentation as well.
Know Your Credit History
If you plan to apply for a small business loan, you need to know your credit history. In fact, you need to know that your credit history is clean, clear, and blemish-free. Before you apply, take the time to go over your credit report. If there are errors, have those remedied. If there are problem areas, clear those up as soon as possible. A clean credit history will improve your chances to obtain a loan for your business needs. Don't forget to clean up your personal credit report, as well. You never know when your personal debt will come into play when you apply for a business loan.Share