Running a business is an exciting adventure, yet it is also a big responsibility. There are times when your company needs updates, as well.
As a business grows, so do the expenses. You may need more office space, more employees, or better computer software. These expenses can easily exceed your regular budget, even when business is going well. Loans are a common occurrence in the business world.
There are, however, several requirements that must be met. Proper documentation can save a lot of time.
Personal Information
Like any financial agreement, your basic personal information is necessary for the application. Be sure to bring in proper identification.
Most companies require more than one form. Some items that are accepted are a driver’s license, birth certificate, or passport. Since this loan is for a business, you may also need documentation that states the business name and authentication.
A credit check is usually initiated right away. This often determines the amount of risk a loan company feels they are taking. It can also affect your interest rates. Your company may have a separate score that also plays a part in the decision.
Business Records
Your business records are necessary to show how much your business earns annually. Tax documents, invoices, and expenses are all assessed by your loan officer.
They want to see your average revenue over a certain period of time. The standard time frame is at least three months prior to you application. It can also help your case if you can show a pattern of growth.
The loan company likes to see that the money is going to a viable source. A steady increase in monetary intake proves that updates to your company are worth the effort.
Bank Statements
The investigation of bank statements can feel a bit personal, however, many creditors prefer to see your current balance and spending habits. This shows if you make your bills a priority, or live outside of your means.
Even with Business Loans, your personal habits matter. You should have three months’ worth of bank statements for both yourself and your company.
Estimated Use
Do your research before you head to the loan office. Make a plan to show where the loan money is going to go. If you are having renovations to a building, bring copies of the estimates with you. If you need to purchase computers and software, make sure to find the best prices and show them in a spreadsheet. You are more likely to receive money when you have a viable business plan.
Takeaway
Take the time to gather documents before you turn in the application. Loan approvals go much faster when you have everything ready at the same time. This also helps the loan representative stay organized.
You are sure to be better received when you show up prepared for the event. Personal documents and bank statements are usually easy to get together.
The proposed use for your loan, however, may take some time. It is pertinent that you show a feasible plan for your personal budget. Prepare ahead of time and present this plan with confidence.