Securing the right loan at the right time can transform your business for the better. Unfortunately, too many companies that could benefit from a loan don’t apply. Or, if they do apply, they don’t put their best foot forward because they don’t understand how to create a loan package. Simply put, a loan package is everything you need to share with a lender before you apply for a small business loan. And assembling a compelling loan package could make or break your application. The good news is, we’re here to help. Here are a few major areas you need to focus on before you speak to a lender:
Arrange all Personal and Business Documents
In addition to your business’s credit score, many lenders will require you to produce personal financial information as well. This can include, but is not limited to: financial statements, tax returns, proof of ownership, proof of lease, and any licenses you may require to operate your business. So take some time to put your personal and professional finances in order before you approach a lender. Plus, dedicating time to studying your own books will give you a better idea of what to expect heading into a meeting.
A Cogent, Realistic Business Plan
Even if your credit isn’t ideal, you can still land a business loan if you present a comprehensive business model to your lender. The more detailed your plans to use borrowed capital are, the more likely you’ll get the loan you want. In addition, provide essential metrics and projections to help you work out a payment plan with your lender. But above all, resist the temptation to exaggerate any numbers you present to a lender –– it could land you in hot water down the line. And that goes double if you end up with the wrong type of business lender.
Just because intel doesn’t relate to your business itself, doesn’t mean it’s not worth sharing in your loan package. Crafting a quick guide to how your industry functions and how your company fits into your market can be a great way to express your business’s potential. Don’t be afraid to be frank in assessing your market. This is especially true if you work in a niche market, or if the competitive landscape has changed greatly in a short period of time. Lastly, don’t forget to include any other business affiliations you might have in your report.
A Quick Review
Before you apply for a loan you’ll need to assemble everything relating to your own personal financial stability, and the financial state of your business. As with anything, it’s better to over-prepare than to arrive short-handed. While it may seem like an undue amount of prep-work, don’t forget about the impact the right business loan can have on your company.
Get Started Today
At National Business Capital, we’re more than happy to help you through the process of landing an important loan for your company. Whether you’re just starting to explore your options, or you’re ready for to pull the trigger, contact us and see what we can do for you. Had a loan package turned aside by the bank? Then check out our free eBook on how to get financing when the banks say no, here: