The 125 factors that affect the fundability can be broken down into 4 main categories. One of those categories is the Application Process.
Here are 6 ways applying for a small business loan can affect the fundability of your business.
# 1: Timing
When you apply for a loan makes a difference. Consider your current circumstances. If you have recently paid off a lot of credit card debt, that’s great! But, the payoff will not show up on your credit report immediately. Lenders will see more debt than is actually there.
The same is true of any change on your reports. UCC filings, liens, bankruptcy, and anything else that may be added or about to roll off can affect a credit provider’s decision.
You have to monitor your business credit and personal credit reports so you can get the timing right when applying for a small business loan.
#2: Lender Negotiations
Having a good relationship with a lender that is familiar with your business and its industry is priceless. It can allow you insight to understand if you have flexibility to negotiate. Maybe you apply for a loan and get initial approval for $10,000. If you have a couple of other credit providers that are ready to extend substantially higher amounts, you might be able to use that to convince the lender to approve more.
#3: Application Format
It may seem like applying online is always the best option these days. It’s for sure faster and easier. Yet, there can be substantial differences in what is available if you apply in person or with a paper application.
Some lenders may require a personal guarantee if you apply online, but have a paper application that does not require one. There are any number of possibilities, that’s just one example.
#4: Lending Product Selected
You have to choose the right lending product for your business. A large project you want to complete may mean you need a business loan. However, if you simply have a lot of smaller expenses and want a way to manage cash flow, a credit card or line of credit may work better
#5: Lender Selection
Some lenders may loosen their belts and lend more around the end of the
year. Eventually, they will tighten up again. Then, another group of lenders may decide it is time to increase lending. Knowing which lenders are lending more what you are applying for a small business loan greatly increases your chances for approval.
6: Verifiable Information
When you apply for credit, you have to include your business name and address on the application. Lenders will then search with the Secretary of State to make sure you are the owner. They will also verify your business phone number and business address match what is on file with the Secretary of State.
Get Help Applying for a Small Business Loan
Lending trends, choosing the best lending product, and a number of other factors in this process are difficult to maneuver on your own.
This is where the business credit specialists at Credit Suite can really help. We are in a unique position to be able to see the big lending picture throughout the year. Our finger is always on the pulse of the industry, so we can help direct you toward lenders that are lending the most at the moment. We can see the big picture.
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