Many small businesses struggle to get loans, especially from traditional banks. Online lenders like First Union Lending can help you choose the type of financing you need and get you funded ASAP. Before applying for a business loan, there are specific steps you’ll need to take to seem like a well-qualified business.
Understand How Much You Need
A lender will want to know how much funding you seek and what the funds will be used for. This can help them select the funding option for your business. Ask for a little more than you think you’ll need but within reason. You do not want to default on your loan.
Gather Your Information
Lenders will require you to fill out a funding application. You must provide the correct documents and information about your business. Here are some of the documents you’ll need for a small business loan:
Credit Report
Credit reports reveal your ability to pay loans and debts in full and on time. Having less than perfect credit won’t prevent you from being approved for a loan. It’ll likely prompt higher interest rates or small loan amounts. To acquire your credit report, you or the lender can reach out to a credit bureau such as Dun and Bradstreet.
Bank Statements
Lenders will want to review your bank statements during the application process. The purpose of bank statements is to prove the legitimacy of your business. Lenders are more likely to loan out funds to small companies actively earning revenue while managing their expenses.
Tax Returns
Business income tax returns can reveal how your business flourished in the past. As a business, it is essential to balance maximizing deductions while maintaining a consistent flow of revenue.
Income Statements
Lenders utilize income statements to understand better how your company has performed over the years. Income statements reveal how your business has experienced cash flow. Like an excel sheet or budget sheet format, it will clearly state various revenues and expenses.
Balance Sheets
While a balance sheet may sound similar to an income statement, it is slightly different. It reveals what you currently own and how much you now owe. It tells other financial components lenders may need to know, such as current assets, liabilities, sources of equity, and accounts receivable.
Budgets & Cash Flow Projections
When asking for particular loans, some lenders will want to know how you plan on utilizing the financing. Some business owners use the funds to cover expenses such as real estate, inventory purchases, expansion projects, purchase of new equipment, and running payroll.
Review Your Online Presence
The purpose of all of this information is to determine if your company is legitimate. Lenders will also review your online information about the company and you, the owner. Anticipate this research, and check your social media accounts and website. Are they updated and professional? How are your business reviews? These factors can influence the lender’s perception of your company and their decision to approve you for funding.
By anticipating what lenders require on your loan application, you increase your chances of getting a business loan.
First Union Lending Is Here to Help Your Small Business
First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to $2 million. Call today to learn more about our various financing solutions to help your business grow and become successful.