Posted by: LISC Small Business on June 27, 2016
Once you've decided to apply for a small business loan, it's time to get organized! If you aren't already keeping an accurate track of your finances, you'll need to get everything in order before approaching a lender. (Hint: our free online financial tool can help you!) Below are five additional tips for borrowers just starting the loan application process.
- Know how much financing your business needs. Determine your total project costs and how you will use the loan: is it for working capital? to purchase a new building?
- Know how much financing your business can support. Most - if not all - lenders will require a down payment. For our own program, we require at least 10% down for existing businesses and 30% for startups. Determine how large of a down payment you'll be able to provide comfortably.
- Practice your business pitch. The better you are at explaining your business, the easier it is for lenders to understand your company and the smoother the loan process.
- Review your credit report. Lenders will pull your credit report, and you want to make sure everything on it is accurate. Reviewing your credit report ahead of time gives you a chance to fix any errors. Our team uses www.annualcreditreport.com to review our own personal credit reports.
- Know your options. There are a lot of ways to finance your business - from crowdfunding to SBA loans - but make sure you research the different types of loans and lenders so that you can make an informed decision. SBA LINC is one way to connect with SBA lenders.