Fundera Ledger How To Prepare For Your Small Business Loan Application

However, the underwriting criteria might be different. For example, a novice startup entrepreneur might have to put up collateral in excess of the loan amount, while an entrepreneur with a solid history might be able to get by with collateral less than the loan amount. In both cases, Seelinger adds, if a guarantortypically a spousehas enough income to cover living expenses and all or most of the proposed debt servicing, less collateral may be required. Do your research first If youre hoping to get a loan from a bank, before submitting a loan request, Seelinger recommends speaking to each banks regional business center to find out how they view lending to startups, to companies in your industry, or any other parameters. Some banks wont lend less than $100,000; others will only lend to companies with revenues of at least $250,000; some will not lend to certain industries, he explains. By interviewing the lender to learn their underwriting standards, youll avoid wasting time submitting an application thats likely to be rejected. Complete your small business loan application as soon as possible Once you find a potential lender, Seelinger says, ask exactly what documents they want, then complete and submit everything promptly. If documents are submitted piecemeal, the entire approval process slows down, he says. Inevitably, the underwriting process will generate questions, and the bank will request clarification or additional documents. Provide them as fast as possible so you dont delay your loan approval or cause the bank to reconsider. By knowing what a lender wants, getting your documents in order and providing them quickly, youll improve your chances of getting that much-needed business loan. So what documents do you need?
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