Photo creds: AA FastFunding
When starting a venture, capital is key. If you are planning to approach any lending or funding institution to finance your growth, you’ll need a solid loan application. Make no mistake – most lenders perform thorough assessments of business loans. Consider these tips for securing the loan your small business needs.
1) Business Plan
Lending institutions need to be able to examine your goals and evaluate your company’s value. Performing and presenting this research in the form of a detailed business plan not only demonstrates that you know where you’re going – and understand how to get there – it lets lenders measure how likely that journey is to generate revenue. It’s up to you to convince your financial institution that your loan will generate results with practical projections.
2) Funding Strategy
Most lenders need to know exactly how their funds will be spent before they can decide whether or not to advance them. Take some time to explain how your business will benefit from a distinct loan, and whether that money has been designated for:
- advanced software to help business processes run more efficiently
- employee hires for better sales and marketing results, etc.
Lenders will weigh your specific financial needs against the loan amount you’re applying for; therefore, you should make sure there’s a balance between funding purpose and the type of loan you’re seeking.
3) Financial Records
Most financial institutions will want guarantee that your business is stable before agreeing to lend you money. And they’ll be investigating your financial statements to insure your company’s capacity to support debt commitments. Demonstrating organized, up-to-date balance sheets, cash flow statements, and other important records allows lenders to assess your current financial situation.