Welcome back! This is Part 3 of our series Searching for the Best Small Business Loans.
Pro Tips on Finding the Best Small Business Loans
Keep Your Personal Credit Clean
When seeking a loan for an emerging business, your credit score is as important as it is when you’re trying to get a personal loan. If you have less than stellar credit, the lender is more likely to perceive you (and your business) as a greater risk. A word of advice before applying for any business loans would be to try and boost your personal credit. It’s not a quick process, but it can save you time, frustration, and money in the long run.
Have a Business Plan
It’s important to remember, if you want your business to sell, first you have to sell your business. If you’re looking for a large loan amount from your lender, be upfront about it. Tell your lender exactly why you need the money. Present them with your plan for the future, and tell the lender how its funding fits into your plan for success.
You will also want to be well organized. You will need a wide array of documents:
- Bank statements from the previous three to twelve months
- Business financial statements and tax returns
- Business license(s) and other certificates
- Business overview and history, goals, challenges
- Current P&L statements
- Business loan application
- Personal financial statements
- Personal resume including business experience
Be sure to lay out what makes your business a better opportunity than others. This may be one of the most important aspects if you think you might not be a strong candidate.
Compare Options for Business Loans
Lenders hold more of the cards when it comes to small business loans, but you should still inquiry around before you begin the lengthy application process with just one lender. If you are currently using a bank at the moment, it may serve best to try them first. Having a current relationship with them already might incline them to provide funding given your backstory.
If not, sites like Lendio can match you with lenders who are more willing to make you an offer. After you answer a few brief questions about your business and your needs, you’ll receive the names of lenders that might be a good fit.
Searching for the Best Small Business Loans
Even in today’s ever evolving marketplace, it can still be difficult to land the right business loan. Even if you’re a strong candidate, you might not be the “right” candidate for a particular lender. Your research on the lender is as important to the process as the lender’s research on your business.
It’s vital to know your main loan options. There is a significant difference between alternative lenders, traditional banks, and SBA backed agencies when is comes to business financing. Knowing which criteria is required is very important in the loan application. It also goes without saying to know what each type of lender will be looking for. Make sure you know more about them than they know about themselves.
Make sure you know your loan types. Today, most lenders that engage in small business financing focus on speciality loan products that fill specific niches for small business owners. These alternatives are much easier to come by versus traditional methods of funding. It is important to understand what these alternatives can be used for.
Lastly, and the most important attribute would be ensuring you are a solid candidate. Be confident in who you are and what your business represents. Keep your business and personal credit clean and put together the best business plan ever created.
Lendio’s mission is to empower your business by making small business loans simple through options, speed, and trust. Whether you are looking for a business line of credit or A/R financing, Lendio offers hundreds of different loan products from a variety of lenders. Finding out which business loan is best for you is why we’re here.
Sign up today and in minutes be matched with the perfect small business loan.