Industrial and commercial lending is increasingly popular for larger companies. However, according to the Pay Net Lending Small-Business Index, the quantity of traditional bank loans available for small businesses has decreased significantly over the past year.
People should face it. Small business owners remain uncertain about what 2015 holds for the U.S. economy and for their business. As a matter of fact, optimism remains low according to a report that the National Federation of Independent Business has recently published.
If a company needs a temporary infusion of money in order to grow, obtaining a loan may be hard in an economy that is still recovering. However, following these steps can help a business get a loan approved in no time.
Provide Data About Company Management
This is an important factor in presenting a loan for approval. Because of this, companies should help their lender by providing a resume for each owner or important employee and describing their responsibilities and functions.
If an important position has not yet been filled, companies should include a thorough job description that details the kind of person they are looking for. This will confirm to the lending company that they have analyzed their needs and determined the requirements for the position.
Provide Information About How Much Financing They Need and How They Will Use it
In order to increase the chances of having a loan approved, a company should provide a precise dollar amount. They should also give details about how they will use the funds. If they are planning to refinance for a longer term and consolidate their debts, they should provide copies of their promissory notes.
They should also not forget to state how much they think they can save with refinancing. A detailed loan amount with promissory notes and copies of bids or proposals can help strengthen a loan application. This is because the lending company can understand the facts that back up the requests.
Detail Your Credit Score and History
A company’s credit score is an integral part of the loan process. This is because it shows the way that they handle their obligations. Lenders will eventually perform their own credit check. However, owners can discuss any issues ahead of time if a company can provide data prior to them doing so.
If they do not know their credit score, they should take the time to research it online where low cost reports are available. If they have problems such as bankruptcy or identity theft, it is important to discuss it with the lender up front. They should also provide evidence that these issues have been discharged or resolved.
Always Explain How to Achieve Projections
At this point, it is time for business owners to brag about themselves and their companies and sell their forecasted success and vision to their lender. If client has expressed interest in doing business with them, they should give their lender a copy of the correspondence. They should also provide proof that a market exists for their service or product.
Aside from that, they should demonstrate the validity of their expense and sales figures. If their cost of goods sold has historically been 60 percent, people should try to lower it and provide details of the calculations. If the loan that they are applying for is intended to purchase a new piece of equipment that will allow them to reduce their staff needs, they should also describe how this will happen and show the math.
Obtain Professional Help
Aside from doing these things to increase the chances of securing a business loan, they should obtain professional help. One of the companies that can do this is Advanced Fund Network. They help people increase their chances of getting loans approved by using several criteria that could help determine the type of loan that they should be applying for.
In addition, they can provide a business with the funding that they need until they find the right loan package for them. This enables companies to secure adequate funding to help them with their operational costs and pay their debts.