Getting a small business loan is time-consuming. But if you qualify for a small business loan, you’ll save yourself a lot of hassle and time.
In most cases, when you apply for a loan, your lender will have pre-approved you, meaning they know exactly how much money they’re going to lend you before you even complete the application process with them.
So you can start thinking about what types of products/services you want to purchase, who you might sell them to, and where you would like to open the store(s).
This also saves you the time to write out all of your down payments and closing costs on paper.
Here are three easy steps that will help you identify whether you qualify for a small business loan or not.
1) Credit Scores and Personal Liability
Personal liability and good credit scores help identify whether you qualify for a loan or not. Establishing good credit is one of the first steps in obtaining a mortgage or loan from a bank or other lending institution.
These include personal loans, auto loans, small business loans, home improvement loans, etc. So it’s important to monitor your credit history regularly to make sure that you’re doing everything possible to maintain its good standing.
|Related: how to get a small business loan without personal guarantee|
2) Financial and Legal Documents
When you apply for a small business loan, ensure you have gathered all the important and sufficient legal documents required to apply to your bank or financial institution of choice.
Whether it’s your SBA 504/7(a) statement, pay stubs, tax returns (income and expense), insurance statements, bank accounts.
Ensure there are no issues in the background check on any company or individual lending officer handling your case.
3) Strong Business Plan
Having a strong business plan is crucial for qualifying for any small business loan. However, this document also can help you determine the feasibility of your ideas and plans, especially in regards to how much money they’ll take to get off the ground and make it big.
|Use this Credit Calculator to help plan your repayments:|
How To Get A Small Business Loan Without Personal Guarantee
Businesses are always considering getting a small business loan. But before you go off to a lender and apply, you will need to consider if you will be needing a personal guarantee to secure the loan.