Getting a small business loan is no easy feat, but that doesn’t mean it’s impossible! Below are some of the basic first steps of getting through the approval process. While each company will have a slightly different experience and procedure, these are the basics. Following these will put an enterprise on the right track towards making their dreams a reality!
1. Determine the Business’ Needs
First things first: business owners need to realize why they need a loan. What is the money going to be used for? It’s important to have a detailed plan around how to manage the money in the business, with and without a loan. Small business owners have a lot to think about, from reaching customers to paying for rental space, and so forth. Borrowing money may be the best way to make these goals a reality. Sit down with the team or company partner and determine how much money is really needed.
2. Find the Right Lender
Once the amount required is determined, it’s time to look for lenders. There are so many options out there, so there is bound to be one that fits the business perfectly. Some things to consider include the loan limits, time frames, and interest rates of various loan lenders. It’s crucial to get as much information as possible before jumping into an agreement. Loans are a serious undertaking, so it’s imperative to take the time to do research beforehand. Some lenders even work specifically with small companies!
3. Learn the Application Requirements
Each lender will have their own regulations and requirements for a small business loan. This is part of what makes the research process so important. It’s a good idea to take a thorough look at the application process for several different lending institutions. This can help with getting familiar with the legal jargon, as well as weighing the pros and cons. Never hesitate to ask questions or voice any concerns; applying for a loan is a big deal!
4. Gather the Documents
The final part of getting ready to borrow money from a lending institution is to collect all the documentation required. Different institutions will have their own set of rules, but typically businesses need to present things such as tax returns, bank statements, as well as commercial leases or agreements. Remain in constant contact with the lender to keep ahead of new information or processes that need to be done. Find more info at Thinking Capital and learn from their helpful resources.