Qualifying for a business loan can be a challenge for some business owners, especially those in the high risk business. If you are looking for a loan from a traditional lender, the process can be long and grueling. And if you have bad credit, it is almost impossible to attain a business loan with a reasonable rate. The following are a few questions that lenders will ask when you apply for a loan.
Are You Able to Repay the Loan?
Lenders won’t ask you this right out, but they ask a considerable amount of questions to get to the answer. Applicants must show lenders that you have the experience or revenue that can repay the loan. Every lender needs to know that you can meet or exceed the periodic payments.
Before talking to a lender, be prepared to discuss your business’ revenue, profitability, and how you manage your cash flow. Oftentimes, banks will ask for a profit and loss statement. Online lenders will ask for the last 3 months of bank statements. Can you repay a loan?
Will You Repay the Loan?
This isn’t the same as “are you able to pay the loan.” This question comes down to your business’ integrity and payment history. This is why lenders look at your business credit profile and payment history to gauge your future behavior. In most cases, a poor credit profile doesn’t make a very good prediction for the future.
Do You Have a Backup Plan?
Just in case things don’t go the way you plan, do you have the collateral that will pay off your debt? Most lenders require collateral or will use a general business lien against company assets until the loan is paid. Avoid this situation by securing the means to repay loans no matter what. Showing that you have a solid plan in place in case the business isn’t so successful, will improve your chances of loan approval.
FAM is your high risk cash advance provider that will work with your business to secure funding for your business. FAM offers high approval ratings, as our approval is based on performance and not credit. In as little as 72 hours your business can be funded without putting your credit or collateral on the line.