Preparing for the Small Business Loan Process
Many small business owners are crushed when they discover they have been rejected for a loan to finance their budding business. And the sad thing is, sometimes the decision...
Many small business owners are crushed when they discover they have been rejected for a loan to finance their budding business. And the sad thing is, sometimes the decision to reject a small business loan comes down to what the applicant failed to properly provide during the application process. So let's turn the tables! Here are some things that every loan officer wants to see when considering a loan.
A proper business plan. A well executed business plan is the cornerstone of a successful application. Be thorough, and use clear language to explain, in detail how your business is going to make money and what you plan to do with the loan when you receive it.
Your personal finances. You are your own best collateral when it comes to getting a small business loan. Provide the bank with complete tax and financial records. Don't cut corners on the application. Give the bank everything they want to see to the letter. A good bookkeeping service can help with the process.
A great credit rating. Get a copy of your most recent credit report and credit score. These items will be the guide by which the loan officer decides how much money you will receive and what rate you will pay for your loan.
Tax records from your business. If you have been in business for years, or owned a previous business, then include all the relevant business tax returns from those years for those enterprises.
A powerful presentation. Anything you can do to enhance the presentation of your financials or business plan will make a positive impression on the loan officer. Beef up your materials with pie charts, graphs, and PowerPoint presentations to make you look more professional.
A great pitch on appointment day. Arrive for your appointment with a loan officer on time (or for the call if you handling the transaction over the phone). Be prepared to talk at length about your business. Be smart, fact-oriented, and most importantly, enthusiastic.