Some people have the funds they need to start a business or make an investment, but others are going to have to find different means to achieve their goals. Many Americans need to borrow money to get their ventures off the ground, and that process starts with applying for a loan. So how do you go about doing this in a way that puts you in the great position to succeed?
Commercial lenders will be assessing your application and financial standing before determining whether to approve or deny your loan request. But if you keep the following application tips in mind, you'll see that you have a better chance of getting that "yes" when you make your request.
Get Your Finances in Order
Before you even think about going to a bank or lender to put in a loan request, take a good, hard look at your own personal finances. The lenders will be looking at the last two years of your financial history. If they see anything questionable in there, such as defaults on other loans or penalties from a credit card company for failing to meet minimum monthly payments, you're going to seem like a higher risk. A few red flags here can dramatically reduce your chances of getting approval.
Make a Business Plan
A business plan is a detailed document that shows you have a clear understanding of how to take your existing resources, plus any additional financing, and turn that into purchases, hires, and investments that will actually yield a profit.
Lenders want to see a business plan that ultimately explains how you plan to pay off the loan. If you go to a lender with very little preparation and an explanation that you're just going to "wing it," that's a big red flag that you are not organized or qualified to borrow money.
Look Over Your Assets
While it's not an absolute requirement for getting loan approval, having assets that you can put up as collateral helps your odds. Of course, some loans don't require insurance, but in these cases, the increased risk is offset with higher interest rates. Having assets for collateral makes you a safer candidate for lower risk, lower interest loans.
If you are thinking about getting a loan for your next investment, such as a commercial real estate property, then you should get in touch with us. Apply for the loan you need, and see what we can do to advance your goals.