Small business owners need a loan at different stages in their business. Maybe you need a loan to get started in your new business. If you’re an established business owner, you may be ready to grow and need a loan to help. Whatever the reason, you want to be sure that you are ready for a business loan before you apply for one. How do you know if you are ready?
There are key questions that you should ask yourself before you begin. The U.S. Small Business Administration (SBA) shares these questions on their Business Loans Application Checklist:
- Why are you applying for this loan?
- How will the loan proceeds be used?
- What assets need to be purchased, and who are your suppliers?
- What other business debt do you have, and who are your creditors?
- Who are the members of your management team?
Answer these as specifically as possible. Once you have your answers, begin to gather the documents and other information that you will likely need for your loan application. You should be prepared to share any personal background information that may be required such as former previous addresses, names used, criminal record, educational background, etc.
Other important information that you should be prepared to share are:
- A Business Plan
- Business Credit Report
- Income Tax Returns
- Financial Statements
One key factor in this preparing for the loan application process is defining what you want to accomplish and how you will accomplish it. The business plan mentioned above will be important to show the lender how your current or future business operates from a financial and operational standpoint.
At LiftFund, we help many types of small businesses, from those that fall just beneath bank guideline requirements to those who have limited credit. There are several factors that we take into consideration when we are considering a business loan application. We look at these criteria primarily:
- Your financial ability to repay
- Your personal character
- Your commitment and motivation to improve your business
- A similar commitment to improve your credit
- A good payment history with your other creditors – landlords, suppliers
- Collateral you provide
- If you’re a startup, you must have an alternate source of income.
Since we opened our first office in San Antonio, Texas in 1994, we’ve helped thousands of businesses achieve financial stability and growth. If you’re thinking about a business loan, LiftFund is here for you. Visit our website for a list of loan products we offer.