All businesses, from startups to growth organizations to mature companies, will at some point need to borrow money. While the loan process may be very intimidating, there are a few important things you can do to make the process easier. Be prepared - do what you can to improve your chances of having your loan approved.
Often, your loan officer will not be familiar with your business or perhaps even your industry. Their job is to fully investigate you and your company and then make the approval decision or present your loan to a loan committee. Loan officers look at many things, not just your financial records - banks typically lend based on credit, not just against collateral.
Consider the type of loan
Does the amount of the loan you are seeking match up with your projected cash flow?
Does the term of the loan you are seeking match up with the purpose for which it is intended to be used?
Have all the alternative types of capital sources been investigated?
Documentation
Financial statements - last couple of years and year-to-date
Tax returns - company and potentially personal tax returns
Cash flow history and projection
Business plan
Do you have an overall business plan and is it current?
Does it include important information like major customers, suppliers, and key employees?
Do you have a current marketing plan and are you following it?
Business practices
Does your accounting system adequately show the condition and results of the business?
Do you have a credit policy and is it enforced?
What is your accounts payable policy? How current are your payables? Do you take advantage of any discounts for prompt payment?
What type of insurance coverage do you have? Is there adequate insurance for liability and property damage?
Taxes
Are all your tax filings current (payroll, property, income)?
Are your returns prepared by a qualified professional to help you ensure your tax benefits are maximized?
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