Since the Global Financial Crisis (2007-09), small business owners had difficulty getting approved for a loan from a traditional bank or an alternative lender offering decent rates. Today, it has become much easier to get approved for a small business loan from an alternative lender.
A recent study from Dun & Bradstreet and Pepperdine University’s Graziadio School of Business and Management shows that only 38% of businesses were qualified for a bank loan. In comparison to 70% of mid-size ventures. What is more, today, the Small Business Administration provides even fewer loans. In addition, only 1% of small businesses surveyed were considered eligible for an SBA loan during the same 3 months.
To get approved for some extra cash for your small business as soon as possible, you should take into account even the tiniest details. Below you can find the key points to consider when applying for small business funding.
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- Keep Your Accounts Updated and in Order
Keep your accounts and personal records up to date and in order. Especially, if you are a startup that does not have much in the way of trading records as yet. Lenders usually require information to be sure the loan they provide will not be put at a good financial risk.
Also, they will want to know that they will get their funds paid back on time and with interest. Your updated financial records and taxes you had in the past 5 years will be one of the key things to provide. This type of financial data is important for creating and maintaining a financial dashboard for your business accounts.
- Research Lenders Before Making an Application
It is important to research available options before you actually apply for a loan. Research what potential lending organizations you can turn to that is best for you and can give you the highest chance of approval.
Different companies offer different loans with their specific rules and requirements within different periods of time. You can also apply to banks and boutique online lenders to choose other lending options, including crowdfunding options and other lending programs specializing in specific industries only.
- Prepare a Detailed Business Plan
Prepare a business plan to provide it to lenders if they ask for it. A detailed business plan will show you have well researched your target market and your competitors and have a clear idea about your mission and business goals. It is also important to seriously calculate and make an estimate of sales or profit projections.
You should also take into account the strengths, weaknesses, opportunities, and threats of your ventures. Your business plan should also involve data on the amount of funding required. The monetary benefit you calculate will be the result of the cash injection.Get Started Now