As the economy improves and lending restrictions continue to loosen up, more and more entrepreneurs throughout the country are applying for small business loans to help them buy new equipment, renovate existing properties and expand the size and scope of their companies. But an improving market doesn't make for an automatic "yes" on your loan application. To ensure that you're in the best possible shape before approaching a potential lender, and improve your chances of getting that approval, ask yourself these questions first:
- Do I have all the appropriate forms? While having a business plan is an absolutely crucial part of applying for a small business loan, it's not the only paperwork you'll need on hand. As Teddy Nykiel notes for the Bandera County Courier, before approaching a lender, make sure you've put together a "loan package" that includes: your business plan, financials and projections (including income statements, balance sheets and cash flow statements), personal and business tax returns, personal and business credit reports, personal financial statements, legal documentation (licenses, leases, franchise agreements, notices of incorporation) and, especially important, a written summary of why you need a loan and how you plan to allocate that funding.
- How much capital finance will I actually need? All too often, small business owners will end up lowballing how much they actually need in an attempt to keep costs down and improve their lending eligibility. But it's important to factor in potentially unexpected costs that may rear their head down the road. Otherwise, you may jump through the hoops of getting a loan only to find out it's still not close to the amount you really need — bringing you right back to square one.
Are you an Ohio small business owner looking to expand your company? Consult with Growth Capital Corp. to find the right commercial lending for your needs.