The small business funding process works in the same way that the mortgage on a house works. However, you must submit more financial information to get small business funding. You need to have a checklist complete before you submit your application, and you should not start the application process if you do not have all your paperwork together.
Financial Statements
You will need bank statements for your business, and you may need statements for yourself. These statements together paint a picture for the funding company that allows them to determine how risk you are. You may not be asked to submit your personal bank statements, but you could be asked to if you are a sole proprietor of that business.
Tax Records
You need to submit your tax records to the lender, as well. These tax documents need to go back a few years, and they must show the lender if you have any tax liability. Tax liabilities are expenses you need to pay every month, and you will need to account for that when you are planning on paying the small business loan back.
A Plan
You must submit a business plan or a plan for the loan. You may need money to purchase new software, and you can use the money from the loan for that software. You can take out loans for construction projects, to make payroll or to invest in new products. You have new things that must be financed every day, and the lender is available to finance all your projects, but you must have a plan ready to show the lender.
When You Have No Records
If your business is new, you may not have the necessary records for your application. Some lenders are not going to offer you a loan because your business is new, but you can get loans from other places.
When you make a quality presentation to a lender, they are more likely to take your business seriously. You need to make sure you have a complete business plan ready to show the lender, and you need to have earnings projections, as well. All this information allows you to get the loan you need to keep your business solvent.
Plan ahead for your next small business loan, and make sure that you have all your paperwork in order. Select from the options above, and put together an application that the lender will appreciate.