How to Increase Your Chances of Getting a New Business Loan
Are you interested in getting a business loan but don’t know how to start? You’re not the only one. There’s so much paperwork and figure-crunching in the picture. And then you have to wait for the bank’s decision. Fortunately, the system just got progressive. Now you have options that allow you to break many of the traditional barriers. But this is the general picture:
Dealing with Banks
First off, remember that the bank actually wants to approve you. They certainly want your application to be successful. After all, one of their major revenue sources is the interest you’ll pay. But of course, that’s also the number one thing they need to get out of the way – that you actually have the ability to pay. Your main task when getting a business loan is to present a good business case and prove that approving your loan is a good move.
As you may know, there are many requirements to comply with for those applying for new business loans, including:
> balance sheets and income statements of the most recent two years;
> recent financial statements;
> a business plan that shows the path your business is taking; and
> tax returns and bank account records to back your income statements.
Modern Accounting Software
If you use modern accounting software, you don’t have to pull up any of the mentioned documents. All information crucial to applications for business startup loans, such as growth trends, income and expense records, and forecasts, will be provided by the software. And if you set up your software with bank feeds (allows your income and expense data to flow automatically from your business account/s), the loan approving officer will trust the information even more.
Presenting Your Business Case
As we said previously, those who are interested in getting small business startup loans need to convince the bank that their business is worth the gamble. To do this, you have to understand how bank people think. What is risky for them, for example? What makes them think an argument is strong or weak? Once you know the answers to such questions, you can tell your business story in a way that makes them more likely to approve your loan application. Asking an accountant for help can be an invaluable step.
Quick Small Business Startup Loans
Finally, there’s a much welcome new kind of lender today that reviews your application online and gives instant access to capital. The main idea is, these lenders are more into what’s in store for your business, and less into what happened to it in the past. They won’t bother checking your credit score, for instance. Instead, they will actually study your business with the use of analytical tools, and determine whether or not it will be successful.