Post COVID 19 Business Loan Application
By Rylie Holt
Obtaining a small business loan can be difficult to say the least, especially if you look at the way that things are right now. If you want to help yourself here, then it is vital that you make sure that you have all of the capital you need to take your business to that next level. This means having your ducks in a row and it also means showing the lender that you are responsible. If you want to find out more, then simply take a look below.
Keep your Documents in Order
You have to make sure that your business is in a stable financial state before you go for a loan. The application process will be way more seamless and easy if you are able to keep your tax records, financial records and accounting documents in order. You also have to make sure that your business has a system in place so that you can keep everything organised if possible. At this point it may be worth hiring an accountant as they can work with you to ensure you are given the support you need. If you want to help yourself choose a good loan provider, then Become.co is a great choice.
Maintain Good Credit
In addition to keeping track of all your financial documents, you have to make sure that you are able to pay your bills on time. You need to meet some kind of credit criteria as well, so it pays to look into your credit report if possible. Avoid foreclosures, late payments and charges if you can. Banks will have varying requirements and good credit is a very essential part of the process.
Know What Loan You Need
Understanding the type of loan that is going to work best for you really is imperative. If you apply for an SBA loan, then you will be given a line of credit but you need to make sure that you are in a position to pay it back because if you aren’t then you may end up with a denial. If you are looking for an SBA loan, then the loan provider may have higher standards and you might have to wait 90 days to get the whole process complete as well. If you apply for a line of credit or a merchant cash advance, then you won’t have to worry about that as much.
Demonstrate Cash Flow
If you are an existing business right now, then banks will want to see that you have enough cash flow to make all of your payments. If they need to determine this then they will do an analysis by looking at your tax returns and the debt that you have right now. If you can prove that you have a good amount of cash flow, then this will work in your favour and you may even find that you are able to really turn things around for yourself as well.
Every Bank is Different
There are pros and there are cons when you approach a lending company. When you go to bigger banks, you may find that they are far too focused on their bigger clients and although they might be willing to lend you money, you may be better off elsewhere.