Take a look through this article to identify the important steps you will need to take in order to make your business loan proposal a success. Being organized is the key. Preparation and planning are the essential keys to ensure you get the loan for your business.
Prepare a Business Plan
If you've been following along with our other articles, you might start to notice a similar theme to starting a new business. The business plan is one of the most important pieces of information you put together in the early stages of a business. No, you don’t need some extensive 20+ page document, but it should answer these questions for a loan officer:
- How much money do you want?
- What will you spend it on?
- How will you pay it back?
If you can answer these questions completely and clearly, you should be in good shape. Just be sure to have something prepared before requesting a loan. Check out this helpful article on creating a business plan for more information.
Anticipate Questions About Credit, Collateral and Capital
With all that information above you would think that would be enough, right? Not quite. When preparing to ask for a loan, get familiar with these terms and be able to answer questions as they pertain to your business.
- Credit: Your personal credit and your business credit (if you have been operating another business a while)
- Collateral: Amounts of cash you can use for a down payment, either from your personal funds or from your business
- Capital: Business assets you can pledge to secure a loan
Include Personal Information
During the loan approval process, your personal financial information is going to be a topic of discussion with your lender. This information is particularly important when this is your first businesses. Banks need to have the full scope of your financial history, in order to approve your loan. So, before you walk into the bank, make sure you have the following information:
- A credit report showing your FICO score
- A personal financial statement showing your personal assets and liabilities and the resulting net worth.
- A personal budget, showing how much money you will need to take from your business for living expenses.
Have Everything Needed for a Loan Application Form
When it comes time to start talking with a lender, at some point you will be asked to complete a loan application. Sure, you have all this information somewhere, but the last thing you want to be doing is sifting through piles of documents to find all that information. Set yourself up for success and see the full application checklist here.
Once you have all of this information, take the time to get yourself organized and ready to present. The final step you will want to take is find the right place to apply for a business loan. United Bank is committed to providing real solutions to your business needs. Regardless of your situation, we look out for your best interest and assist you in making your dream a reality. Connect with a lender today to get the conversation started.