What You Should Know About Businesses This Year

Getting Approved for a New Business Loan Application

Are you interested in getting a business loan but don’t know how to start? You’re certainly not alone. There’s so much paperwork and figure-crunching in the picture. And then you have to wait for the bank’s decision. Fortunately, the system just got progressive. Now you have options that allow you to break many of the traditional barriers. But this is the general picture:

Dealing with Banks

First, take note that the bank would actually want you to get a loan. They do want your application to succeed. Besides, the interest you’ll pay is one of the major ways they make money. But of course, that’s the first thing they want to be absolutely sure of – that you have the capacity to pay. Presenting a business case that is convincing enough for them to approve your application, is your main job when it comes to getting a business loan.

Usual Requirements

As you probably know, applying for new business loans comes with a number of requirements, such as:

> income statements and balance sheets for the last two years;

> latest financial statements;

> a business plan discussing where your business is going; and

> tax returns and bank account records to back your income statements.

Modern Accounting Software

If you use modern accounting software, you don’t have to pull up any of the mentioned documents. All information crucial to applications for business startup loans, such as growth trends, income and expense records, and forecasts, will be provided by the software. And if you use software that has been configured with bank feeds (this means your income and expenditure information will be accessible right from your business account/s), the loan officer will find your information even more reliable.

Presenting Your Business Case

As we mentioned earlier, those who want their applications for small business startup loans approved, should be able to convince the bank that their business is a good bet. To convince them, you have to be aware of how bank people think. How do they assess risk, for instance? What makes arguments strong or weak for them? Once you know the answers to such questions, you can tell your business story in a way that makes them more likely to approve your loan application. It’s good to consult an accountant for this.

Immediate Small Business Startup Loans

Finally, there’s a new and very welcome type of lender nowadays that checks applications online and offers immediate access to capital. These lenders basically think more about what could happen to your business in the future instead of what had actually happened in the past. For example, they won’t look into your credit score. Instead, they will actually study your business with the use of analytical tools, and determine whether or not it will be successful.