A successful business loan application is the result of many different factors. Follow this checklist to improve your chances of getting the loan you want.
- Shop around for the right lender. Many lenders have specialties: by industry, by loan term, or by business size. Seek out the right lender for your needs.
- Have your paperwork in order. If you present unorganized and poorly prepared financial statements with your loan application, you can expect to be denied a loan.
- Make sure your credit history and reports are up to date. As with your personal credit history, there may be errors that need to be corrected, and the time to do that is before you apply for a business loan.
- Be prepared to negotiate rates and terms. Every lender has some flexibility, so make sure that you ask for the most favorable rates, then negotiate every item and term.
- Put yourself in the lender’s shoes. What would you want to see before you approved a loan for someone like yourself?
- Consider moving your business and personal accounts to one bank. Many bankers report they are more likely to say yes to a business loan if the owner has their business and personal accounts with their institution.
- Consult with your local SCORE (Service Corp of Retired Executives) or SBDC (Small Business Development Council) advocate. Banks and other lending institutions realize that business owners who partner with local resources are a safer risk than business owners who try and go it alone.