Getting Approved for a New Business Loan Application
Are you interested in getting a business loan but don’t know how to start? You’re certainly not alone. There’s tons of paperwork and computations involved. And then there’s some sweating on the decision of the bank or lender. Luckily, the entire loan application processing system just got progressive. Now you have options that allow you to break many of the traditional barriers. But below is the total picture:
Dealing with Banks
First off, remember that the bank actually wants to approve you. They do want your application to succeed. Besides, the interest you’ll pay is one of the major ways they make money. But of course, that’s the first thing they want to be absolutely sure of – that you have the capacity to pay. Presenting a business case that is convincing enough for them to approve your application, is your main job when it comes to getting a business loan.
As you probably know, applying for new business loans comes with a number of requirements, such as:
> income statements and balance sheets for the last two years;
> updated financial statements;
> a project plan that details the direction your business is headed in; and
> tax returns and bank accounts as backup for your income statements.
Modern Accounting Software
If you have modern accounting software, there’s no need to get any of these documents. The software will produce all information vital to applications for business startup loans, such as income and expense reports, growth patterns, and forecasts. And if you set up your software with bank feeds (allows your income and expense data to flow automatically from your business account/s), the loan approving officer will trust the information even more.
Presenting a Good Business Story
As we mentioned earlier, those who want their applications for small business startup loans approved, should be able to convince the bank that their business is a good bet. This is possible only if you understand the bank people’s perspective. How do they assess risk, for instance? What are strong and weak arguments for them? If you know the answers to these questions, you will be able to frame your business story in a way to boosts your odds of obtaining the loan. Asking an accountant for help can be an invaluable step.
Immediate Small Business Startup Loans
Finally, there’s a much welcome new kind of lender today that reviews your application online and gives instant access to capital. These lenders basically think more about what could happen to your business in the future instead of what had actually happened in the past. For example, they don’t have to check your credit score. Instead, they will use some analytical tools and start studying your business, and whether or not it will likely succeed.