Whether you own a local small business or a large organization, applying for a business loan can be an intimidating task. Having an experienced lender to help you through the process is important, but what else can you do to set yourself up for success when getting ready to apply for a business loan?
Our lenders put together three tips to help you get organized before you apply.
1. Collect your documentation.
Be prepared to provide two years of historical financial records along with business projections for the years ahead. The documents and paperwork needed may vary depending on the financing option you choose and which financial institution you are working with. Some of the most common documents you’ll need to provide include:
- Your business and personal tax returns
- Business and personal bank statements
- Business financial records
- Updated personal financial statement
- Business legal documents, such as articles of incorporation, franchise agreements, business tax ID, etc.
2. Define what the money will be used for.
You will need to be able to explain your specific plan for the money and how it will benefit your business. Being able to show how your plan fits in with the overall goals of your business and how it will generate more revenue will give your lender confidence in your ability to use the money wisely and pay the loan back in a timely manner.
3. Know your biggest threats and competition.
Make a list of your biggest competition and the external threats that lie ahead for your business. Then, have a detailed plan on how to overcome them. This will show your lender that you are ready to take on the challenges that are bound to come your way as a business owner. You should also be able to explain your biggest strengths and advantages to show what sets you apart from everyone else in the market.
Ready to apply?
When you’re ready to apply for your loan, First State is here to help. We stand behind our commitment to local businesses by offering owners the resources they need to thrive. Contact one of our experienced lenders today to get started!
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