Small business owners are constantly faced with the challenge of keeping up with the changing economy and the uncertainty of what’s to become of their business as another year starts. Let’s face it, it’s not easy starting out in the world of commerce, but luckily, banks actually want to help small businesses out by granting them loans.
The only problem is a lot of banks are unable to properly scale their resources to accommodate every deserving borrower who has applied for a loan. Since many banks fail to update the technology they use, their outdated software prevents them from fully automising and simplifying the lending process.
How can business owners like you increase chances of getting approved for a loan application?
Here are some practical and effective tips from our business brokers Victoria.
Prepare your finances and documentation
Qualifying for a bank or Small Business Administration (SBA) loan typically requires having a business that has been profitable in the last three years. Expect your credit history to be examined by the lender so get everything ready in advance and prepare to present documentation to back it up.
Plan your business pitch
Why does your company need the money and why should you get approved for a loan? These are questions you need to prepare answers to. Don’t hesitate to tell your story because it could very well spell the difference between a yes and a no from the lender. Include future prospects in your pitch instead of just talking about your past successes.
Search for a community bank
You have higher chances of getting approved for a loan if you go local. If your business hasn’t been profitable in recent years and you lack enough collateral to secure your loan, national banks will be more likely to reject your application. You might have greater chances with community banks because they can be more lenient. Getting approved for a loan is definitely worth the extra effort on paperwork.
Consider alternative financing
Another option to solve shortfalls in cash flow is alternative financing. Many small businesses turn to asset-based lending to bridge the financial gap in times of shortage. The downside is these types of loans have a higher interest rate – double, at least.
Helping commercial businesses thrive in Victoria is one of the advocacies of National Brokers Network Business Brokers Victoria. For us to help you find the right commercial property and commercial business, Register Your Property today or Let Us Know Your Requirements so we can assist you.
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