How to Prepare for a Business Loan Application
By: Ryan Attelle
Applying for a loan this day in age can be a difficult challenge. Banks want to lend money, it's what they do, but they are very hesitant to lend to just anyone. With that in mind it is of all importance to be as prepared as possible when applying for a business loan.
The second important step is being thoroughly prepared for a meeting with those you are seeking the loan from. Some things you are going to want to bring with you include your tax returns from the past two years, personal financial statements, a copy of your business plan, and realistic financial expectations.
Now the tax returns and personal financial statements are straight forward but the business plan is up for much interpretation. Knowing your business plan inside and out is one of the most helpful steps you can make in ensuring that you get the loan you are applying for. You have to be able to articulate your vision so that the lender gets a scene of confidence that you know what you are doing.
It is also important, especially for first time lenders, to have realistic financial expectations. Many start ups apply for a loan expecting the moon, but the fact of the matter is the lender has no track record, no evidence that you will be able to pay this loan back. In this regard they have a tendency to shy a way from giving first time lenders a huge loan.
Here are some general questions you will want to be sure to have the answers to. How much do you need? How long will you need it? What are you going to do with the money? When and how long will it take for your business to repay it? Lastly, and this is a question is often over looked, is you want to be able to tell the lender what you plan to do should you not get a loan. It is important to discuss potential risks with you lender as well. They want to see that you have prepared your self for potential challenges. This is because they want to be confident that you have solutions to manage them.
Being prepared with well thought out answers to these basic questions will help make sure your approved for the loan you are seeking. Remember, the first loan is always the most difficult one to get. A great idea is to get a referral from an established and successful entrepreneur. Lenders tend to favor to those who have referrals from some of there best customers.
Remember banks are lending, if they were not they would go out of business. Be professional, and be prepared. With little extra effort you can greatly improve your chances of obtaining your first business loan.
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