If you really want to get approved for a small business loan, you have to actively work towards improving your chances of success. There are multiple things that you can and should do, and they have to do with how you present your case and how you make your financial situation appear to the lenders. With that being said, let’s get straight to it and see what are the steps for ensuring an approved loan request application.
The process of securing a small business loan should start way before your company even needs the loan. This is done by strengthening your relationship with your bank or whatever lender you are going for. Becoming a regular customer and just a familiar face around the office will make it a lot easier for them to give you the loan you require. Imagine if a friend or someone you know pretty well would ask you for money. They surely have better chances than a total stranger that asks you for this favor out of the blue.
Have a plan
It’s not just about how to apply for a business loan, but also why you apply for a small business loan. Having a plan means being able to make a calculated and educated presumption about where your company will be in the near or even distant future, as a result of you receiving this loan. It also reflects on your ability to plan ahead of time and properly use funds put at your disposal. Overall, having a solid business plan will grant you a lot of credibility and improve your chances significantly.
Only ask for as much as you need
One mistake many people make is that they ask for more than they actually need. The smaller the requested amount is, the higher your chances to get approved. As a result, it’s best to only ask for exactly as much money as you need, not a dime more. In some cases, the lender might impose a tax which will deduct a fixed amount from the loan itself, based on your interest rate and whatnot. In that case, you can ask for what you need, plus the calculated added tax so when it is subtracted, you get exactly as much as you need.
Improve personal finances
Personal finances are a great source of information for lenders because they are able to tell the broader picture from how you handle your personal finances. If your business hasn’t been in business for very long, your personal finances are going to be even more important as they will be the main thing the lender will be looking at. That is why you should p0repare for the loan request by cleaning up your personal finances and improving your personal credit score.
Know your options
The bank is not the only place where you can get a loan. There are many lenders out there and you just need to find them. Before you apply for a loan, take a close look at all your options, both offline and online, and see which one offers the best terms, rates and clauses for you and your business.