Small Business Loan: Boost Your Chance for Approval
When your small business needs money for equipment, inventory, expansion or other large expenses, a small business loan can help you cover the cost without going in the red.
There are several ways to make the process less complicated and increase your chances of getting approved regardless of the size of the loan.
1. Give Yourself Options
Before applying for a loan, research the terms and rates offered.
If possible, find out what experiences others have had with obtaining business funding from these locations by asking for success stories, customer testimonials or referrals to speak with previous customers.
Create a list of your top choices, and call each one to clear up any questions, concerns or confusions that arise.
Having multiple options allows you to move right on to the next lender should your first application be denied. This is especially important if your first option is a bank as local small business owners often have difficulty getting approved for a bank loan.
2. Get All of Your Paperwork Ready
You need to be prepared to share some financial documentation with lenders. Each loan provider will have different requirements so ask in advance what you’ll need to provide your loan officer.
These may include your business plan, balance sheets, credit score, bank statements, tax returns and proof of adequate collateral depending on which lender you’re working with.
3. Understand the Loan Types
Many types of loans exist for business needs such as purchasing equipment, investing in real-estate, restocking inventory and supporting cash flow. Terms, rates and requirements differ between loans, so be sure to get the specifics of each one before deciding which is best for your business.
If you’re not sure, speak with a loan officer and ask for his or her recommendation.
Working Capital Loan
A Working Capital loan is perfect for small businesses that want to purchase new equipment or start a big renovation project. It’s also perfect for business owners looking to expand and open a new location.
Business Line of Credit
A business line of credit is great for small business owners looking for a flexible loan option. Take only what you need and save the rest for a rainy day. You only pay interest on the amount you draw on and there are no penalties for paying back early.
A bridge loan is a great fit for seasonal small businesses. If you’re concerned about cash flow during your slow periods, a bridge loan can help you bridge the gap between seasons and give you peace of mind.
Merchant Cash Advance
A merchant cash advance is an option of last resort. Merchant cash advances often come with predatory rates and will hurt your cash flow in the end rather than helping you get back on track.
If you’re frustrated because you haven’t been able to get approval for a business loan through your bank contact us today. The loan officers at ARF Financial are experts at helping small business owners get approved for working capital.
4. Maintain a Good Relationship with Your Loan Provider
As long as you have a solid plan for using the money to improve your business, you should have no problem getting the funding that you need from a lender.
Once you have the money, continue to maintain a positive relationship with your lender by meeting the payment deadlines and keeping your finances in order. Making a good impression the first time can help improve the odds that you’ll be approved for future loans.
Contact us today to speak with a loan officer in your area about obtaining financing for your small business.