3 Things Not to Do When Applying For Business Loans

Small business owners are some of the most hard working and knowledgeable people on this planet. They have big dreams and nothing can get in their way. One fall back for such a driven and motivated person is that often times, certain operational functions are not carried out correctly. Because small business owners want to move swiftly, certain details can often be overlooked, causing the business to not run as smoothly as we all want it to.

Applying for business loans is one of those operational functions that small business owners just can not seem to get their arms around. Here are a few tips on some of the things you should not do when applying for business loans.

Number 1 – Banks and lending institutions have no interest in taking on any kind of risk whatsoever. The recession has spooked lenders to not lend out money to anyone, or any business that does not have exactly what they are looking for. In knowing this, it is important to understand what the banks’ underwriting guidelines are. Do not be intimidated by the bank or its loan officers. Once you understand how their processes and guidelines work, it is easy to entertain those processes and guidelines. Ask the bank what it will take to be approved for the particular business loan you are looking for. Do they want a certain personal credit score? Do they require a good business credit score? Do they require you to be in business for so many years? Once you have found out what those guidelines are, you can go back and work on falling within those guidelines. Do not walk into a bank and apply for a business loan without first knowing what their underwriting guidelines are.

Number 2 – Your credit score is one of the biggest factors determining whether or not you are going to be approved for business financing. Many banks are going to require that you have a decent personal credit score along with a good business credit score. Yes, the two scores are different. Before applying for financing, you need to check both your personal credit score along with your business credit score to make sure they are what you think they are. Applying for a business loan without knowing what those scores are is a big risk. There is nothing worse than applying for a business loan and being turned down because you thought you had a 700 credit score and you really had a 620. This will also affect your future chances of being approved for a business loan with any other bank or lender. Once you have been denied by three banks, you are most likely going to be denied by all other banks because your credit score has been checked too many times in such a short period. Do yourself and your business a favor and know your own numbers before anyone else does.

Number 3 – There are two facts that many small business owners fail to see in our current economy. Number one is that nearly every small business owner in this country is starving for money, which means there are thousands of small business loan applications sitting on loan officers’ desks. Number two, loan officers are paid on commission, which means they are only paid when a loan has been closed. If we know these two facts to be true, then it is vitally important to have a very well assembled loan package. If you give the loan officer any excuse whatsoever to have to find more information on your business, your loan application is going right in the trash. Loan officers want to be paid, which we know only happens when a loan is closed. In this economy, loan officers are only going to spend their precious time on loan applications that they know are easy to close. Your loan application has to be prepared with everything the bank wants to see when applying for a business loan. This includes a well written business plan, professional looking financial documents, articles of incorporation, and good personal and business credit scores. If you have these documents, do not put them all in a shoe box and walk into the bank. Organize them neatly and professionally so the banks perception of your business is a positive one. Do not think you are going to be approved for a bank loan or line of credit without being prepared.

In conclusion, think about the banks money as your own hard earned money. Would you lend out money to a business owner that does not have what is required to own and operate a low risk, positive cash flowing business? No, probably not. Put yourself in the banks’ shoes and think about what you would want to see. The more prepared you are when applying for business financing, the better your chances of getting approved for business financing.

Trey Markel is the CEO of T3 Media, an organizatio

Small Business Loans – The Ideal Credit Option

Just like individuals, businesses are also in need of finance. In fact, it could be said that businesses need finance more than individuals to run the show. There are times when the business meets financial bottleneck or may need extra finance to start or alter some area of the business. In such times, loan options are always looked at. For small and medium businesses it is always better to go for unsecure small business loans to solve the problem.

How To Get A Small Business Loan

Unsecure small business loans are available for individuals and businesses. The steps to apply for them are quite different when it comes to business loans when compared to personal loans. The main difference from personal loans is that for business loans the credit score of the business is usually considered. If the credit score is high then the chance of getting it is higher. Different of them providers require different credit score for providing the loan. It always helps to ask regarding this and get a clear picture of what is required.

A check on the business’s credit score can then be done to see if there is eligibility. It always helps to check the eligibility criteria and weigh the company’s options before applying for it. This is because once one or two loan providers check the credit score and rejects the loan there is always the risk that other of them providers will follow suit. So one should always apply for the loan where there is the best chance of getting approval. In case of these loans there is absolutely no need to give any security or divulge social security number. Once the loan application is filled up getting the loan is easy and some loans are approved within a short period of 24 hours. The repaying of these loans can usually be done within six months to 80 months.

The Advantages Of Small Business Loans

Unlike huge secure financial loans, small loans and unsecured loans have many advantages.

They require minimum paper work.
They do not require any collateral.
They are approved within a period of 24 hours in usual circumstances.
There is usually no restriction on the business types who can apply for the loan.
Most of the loan providers allow unrestricted use of the funds.
The loans are usually available at great rates and are easy to repay compared to other loans.
In many cases there is no annual fee charge.
Guidance and support from the service provider with regard to repayment of the loan.
Finally the application process is simple and easy.
For small and medium businesses financing small business loans are ideal. They are easy to obtain and payback. They are the most economical option that is available and can be used for any genre of business. These loans can also be used for startup companies as well as established companies who are facing financial cringe.