What to Know About Applying for Business Loans
Are you ready to secure a business loan? Hoping to do so in the near future?
If you have questions about how to apply for business loans you’re not alone. Many people are in the same situation as you: they want to secure this type of loan, but are unsure of the process to follow. Fortunately, this is not nearly as confusing as it sounds. While there may be some challenges along the way, there’s nothing that should stop you from securing the money you need to grow your business.
Before you do anything, you need to decide which type of business loan is best for you. There are many financial products to consider, so you have to keep an open mind. For example, you may find that an SBA loan is the perfect choice for your company where someone starting on their 2nd venture may opt for a short term loan.
Once you know which type of loan you want, it’s time to move forward with the application process. Here are some tips and steps to follow:
1. Compare Lenders
There are hundreds upon hundreds of small business loan lenders. Some are better suited to you than others, so you should keep an open mind. You can compare lenders in many ways, such as by calling them on the phone, meeting in person, or doing your research online.
In the end, the only thing that matters is that you understand which lender has exactly what you’re looking for.
2. Know What You Want
You should never assume that you don’t have any questions to answer when applying for a business loan. There are many details you need to address in a timely manner. Here are some of the questions that are sure to come to mind:
- How much money do you need to borrow?
- What term is best for you?
- What interest rate do you qualify for?
- How long does it take to receive an approval (or denial)?
3. Follow the Lender’s Lead
Once you have all the details in order, it’s time to follow your lender’s lead through the application process.
You can typically complete an application online, although you may want to speak with a bank representative by phone or in person. Regardless of the way you complete your application, let the lender give you guidance on how to move forward. He or she will be able to tell you whether you’re able to qualify and in the event that you’re not able to, what you need to do to get there.
Tip: set aside enough time in your day to complete the application in one sitting. This will ensure that you do everything the right way the first time around.
4. Be Patient
It would be nice if you could receive final word on your application within 24 hours, but this isn’t typically the case with a small business loan (unlike a credit card, for instance).
You need to exercise some patience, as it will take a couple of weeks for the lender to review your application, ask you any follow up questions, and provide a final answer.
Tip: stay in contact with your lender during this time, letting them know that you are more than happy to provide any information they need. Much like finding a job, lenders notice who follows up with them and who does not.
Although you may take other steps when applying for a business loan, these ones are among the most important. As long as you know what you’re doing and give yourself enough time to figure everything out, you can be rest assured that the process will come together soon enough.
It can be time consuming to apply for a small business loan, but never lose sight of what you’re getting in return. Once you have the funds, you’ll feel better about your company’s financial situation.
Do you have any experience applying for a small business loan? Did you enjoy the process, or would you do everything possible to avoid it again in the future? Share your personal experiences and top tips in the comment section below. Your advice on applying for a small business loan could help another borrower make the right decision for his or her company.