{"id":3993,"date":"2018-12-11T07:02:24","date_gmt":"2018-12-11T07:02:24","guid":{"rendered":"https:\/\/www.clickfor.net\/?p=3993"},"modified":"2018-12-11T07:02:24","modified_gmt":"2018-12-11T07:02:24","slug":"how-to-prepare-for-a-small-business-loan-application","status":"publish","type":"post","link":"https:\/\/www.clickfor.net\/how-to-prepare-for-a-small-business-loan-application\/","title":{"rendered":"How to Prepare for a Small Business Loan Application"},"content":{"rendered":"

More often than not, small business owners need a source of capital before their business takes off. While the lucky ones have all the money they need, most of the time, others are faced with the decision of applying for a small business loan<\/a>.<\/p>\n

When small business owners apply for a loan, there\u2019s a chance they might not be approved if they aren\u2019t fully prepared. So here are three ways to prepare for a small business loan application:<\/p>\n

1.\u00a0\u00a0\u00a0 Keep Track of Your Credit Score<\/h2>\n

Potential lenders look at your personal credit score. For them, how you manage your credit card debt is an indication of how you are going to manage a $150,000 loan. Of course, your business credit score is also important to lenders. Make sure to separate your business and personal finances before you apply for a loan. Your credit history must also be free of errors. If you do find something wrong, work with a credit agency to help remedy the problem.<\/p>\n

2.\u00a0\u00a0\u00a0 Determine How Much You Need to Borrow<\/h2>\n

A good lender won\u2019t just hand you a loan for funding a business that\u2019s better met by credit cards. Nor would they want to see your business struggle with a huge loan. For this reason, lenders look at your financial statements and determine your DSCR or debt service coverage ratio.<\/p>\n

Recommended Reading :\u00a0Pay Point India<\/a><\/strong><\/p>\n

It really helps to do the same \u2013 determine your DSCR before applying. With a help of an accountant, knowing your DSCR strengthens your loan application and makes for a very compelling case. All the lender has to do is to verify your DSCR and then finally, send you the money.<\/p>\n

3.\u00a0\u00a0\u00a0 Don\u2019t Forget the Business Plan and All the Necessary Documents<\/h2>\n

An easy way to stay on top of all documents needed is by using a\u00a0document management system (DMS)<\/a>.<\/p>\n

While it\u2019s true that you can show up with a lender appointment with only an executive summary in hand (a summary of your entire business plans and a handful of financial documents), it pays to have a good first impression. It\u2019s best to come armed with a comprehensive business plan complete with the concept, target market and marketing plan<\/a>, competitive landscape, and the financials \u2013 the most important part of the loan application.<\/p>\n

The banks will double-check your income, so it\u2019s better to come prepared with all the necessary financial documents. Here is a list of what you\u2019ll need:<\/p>\n