If you are starting up a new business, here’s a checklist to help you prepare for your small business loan application. These are some things that banks expect to see before giving out loans for small business.
1. Business Plan: The most important thing that lenders will look at is your business plan that shows how you will run the business, your plans for the short and long term future of the business and how you’ve planned for obstacles. It’s almost impossible to be too detailed. Try to think of everything that they will want to know. The more you answer in your presentation, the fewer questions the lenders will have which makes it more likely for them to give you the loan with little hesitation.
2. Good Credit: Having a good personal credit score will help you get a great small business loan rate. If your score isn’t good, start taking steps to improve it immediately. Improving your score will take time but is important to do if you will be borrowing money.
3. Business Credit: Showing that you’ve started a credit record for your business is a sign that you are serious about your long term commitment to running the business. Get a tax identification number and apply for a small business credit card so that you can establish credit on the businesses behalf.
4. Asset Listing: While you’ve shown that you have plans for the unexpected, lenders will be happy to see that you have assets to back you up if times get tough. Showing that you have a home, property or insurance policies will show that you are prepared and are committed to following through on your end of the deal.
5. Business Experience: If you have prior business experience, lenders will be pleased to have a list of your background experience. This isn’t necessary but is just one way you can make it easier for them to approve you for a loan.
6. Proof of Income: Lenders will want to see your tax records for the previous three to five years to see that you have been working, whether on this business or another.
7. Reputation: Even in this digital age where most of your dealings with banks are done online in near anonymity, lenders like to know you and have a strong feeling that you are worthy of the risk that they put out in order to lend you money. Use your local bank where you know some of the employees so that you already have some level of built in trust.
Make sure that you get started on these actions as soon as possible to ensure that you complete them thoroughly. Also check with the lenders that you plan to work with to find out about any other specific details that they might require.
For more information, go to Small Business Loan at http://www.unsecuredbizloan.com/small-business-loan/