What to research when applying for a small business loan
Applying for a small business loan can be a time consuming and stressful endeavor. Traditional lending products such as bank loans for small businesses, come with a difficult application process that is hard to achieve approval.
First, when evaluating small business loans, you must know exactly what type of documentation you will need. Some of these documents include a business plan, application and a credit review.
Next is to evaluate the lenders that offer business loans. What is the specific application process for that lender, and what are the typical terms? A business that is applying for small business loans should do the research, but also evaluate alternative financing options if they are struggling to be approved for a loan.
Application review for a small business loan
The typical steps and required documentation for a small business loan application are:
Business plan – the owner of the applying business will be required to submit a traditional business plan to the lender.
Submit lender’s small business loan application – follow the process the lender has established for applying for a small business loan.
Bank evaluates application & credit – The bank that is evaluating your small business loan application will also review your credit. Creditworthiness is one of the most scrutinized variables when accessing the risk of lending your business capital, and can make getting a small business loan very difficult.
Loan offer prepared and sent to applying business – If approved, the lender will prepare a financing offer with the terms attached.
Consider alternative financing options for faster, easier working capital
Many businesses find that even though they have strong sales and business plans, they still cannot get approved for a small business loan due to poor credit. Creditworthiness is one of the most important risk variables for a bank evaluating your small business loan application. However, companies that have strong sales but not very good credit can evaluate and apply for alternative financing options. Alternative finance companies like CFG Merchant Solutions care more about your revenues than your credit history, and can approve your small business for funding today!