There are many possible reasons why you might need a business loan, but regardless of the reason, it is very important that you properly prepare for the loan application process. Before you apply, take note of the following tips:
Figure out how loan applications work in your area
Each country/region has its own set of established financial regulations that govern financial markets, lenders and the associated loan processes. Being aware of the details allows you to present your loan application and the supporting documents in a better and favorable manner. Familiarity with the loan approval process, key points of consideration and the key documents (and the required details therein) will give you a clear head start. Source: Investopedia
Present a well-studied business plan
This may be your most important step. In order to get a small business loan from just about any lender, you have to prepare a good business plan. In fact, until you have a good business plan, chances are you won’t even know how much money you need or how fast you can repay it. The business plan is in addition to the loan application required by the financial institution. Business plans consist of many parts. A good business plan will have several years of past and project financial statements for your business. It will include a statement of collateral or the type and value of assets you will use to secure the loan. You will need to include an analysis of the market your business will serve as well as a statement of your own experience. Source: TheBalance
Maintain timely documents
Transparency into the financial state of your business is an absolute must! The application process will be more seamless if you take the time to keep your financial, accounting and tax records up-to-date and accurate. Make sure your business has a system in place to keep everything organized. You might even consider hiring an accountant, said Mason Cole, co-founder of the law firm Cole Sadkin.
“Many small business owners attempt to save money by self-financing and handling their own bookkeeping,” Cole said. “However, this too frequently leads to owners ignoring the books when they get too busy. A good accountant will also help the owner to look at the books without emotion when making the tough decisions.” Source: BusinessNewsDaily
One of our experienced accountants can guide you through the entire process of a loan application. Contact us today!