The pursuit of growth capital is exciting, and you want to make the process go as quickly and easily as possible. To avoid delays, make sure you’re fully prepared before applying for a business loan.
Here are five key things to prepare before consulting a small business lender:
Not all small business lenders who ask for your business plan will read it page by page. But it’s a necessary document to get a small business loan, and it helps you internalize your vision for the business. After creating a compelling business plan, you’ll be able to quickly and succinctly answer questions and discuss your company’s plans for the future.
An additional tip: If you focus on one area, spend as much time as possible on describing leadership and other key team members. If someone reads just one section of your business plan, they’ll read about the people behind your products and services.
The lack of a specific purpose for loan proceeds is a red flag for small business lenders. It gives the appearance of disorganization and a directionless vision.
Also, think about your ideal loan structure before applying. How much money are you seeking? What is your ideal term? What would be a manageable interest rate? You may not get your desired structure, but it’s a good starting point for discussing and considering the possibilities for your small business loan.
It’s important to describe where your business has been financially and where you see it going in the future. Prepare your financial documents – balance sheet, income statement, tax returns and bank statements – that put your financial history in black and white.
Additionally, you should create realistic financial projections that paint a picture of where you see your business going in the future. These projections should highlight your need for the financing you seek.
You should always monitor your company’s credit. Pull a business credit report before seeking a loan, and prepare explanations for all that it includes — especially late payments and other blemishes. Any small business lender will want to know how much credit you’ve accessed in the past, as well as how you’ve handled it.
Know how your business is legally organized — its legal name, its members, etc. This information is not always top of mind, but it should be included in articles of incorporation or other documents used to form your business. Also obtain copies of any existing commercial leases, franchise agreements and other binding documents.
Getting organized for a loan application doesn’t have to be complicated. At Fundation, we make the small business lending process as easy as possible. If you so choose, our online application system can pull relevant legal and financial documents for your convenience— with your permission, of course.
This helps everyone focus on the most important aspect of the small business loan application — finding a way to get you the growth capital needed to see your business reach its full potential.
Are you looking for a small business lender that will provide you with both the financing and advice to help your company reach new heights? Contact Fundation today and complete our streamlined application process in less than 10 minutes!
Fundation combines the benefits of a bank loan with the ease and efficiency of an online lender. We offer conventional loans with competitive rates to businesses with varying credit profiles. Our technology allows us to deliver capital in as few as 3 business days through streamlining the collection and evaluation of customer information and conducting the majority of the lending process electronically. As a direct lender, we use our own capital to originate and hold the loans we make, so that we can focus on building relationships with our customers. Our dedicated customer relationship model enables us to understand each unique borrower’s business. This level of service, coupled with our best-in-class products, is why many of our customers come back to us repeatedly for more capital.