The process of putting things together in order to get small business loans can be challenging. This article seeks to address how this procedure can be simplified. If you are a small business owner or are about to be one and you are in dire need of small business loans, then you need to read this. You need to know what goes into an application for small business loans and you need to be familiar with the whole process. You do know the old Biblical line that states, ‘my people perish because of lack of knowledge’? Well, in this case, that is what applies and not ‘ignorance is bliss’. You need to know the whole process so that you can know how to go about it and what comes next. By knowing this, you will then know exactly what you will need to present in order to be granted the loan or at least to be considered.
Steps in Getting Small Business Loans
The first step is to identify a financial institution that you will approach for your loan, a suitable one according to you. Once you have identified your preferred small business loans lender, the next thing you will do is to contact them either through phone, e-mail or you can pay them a visit. The purpose of this is to obtain information on what type of small business loans they have and the attendant you find will explain to you about them and will recommend a package for you; one that will best meet your financial needs. So you will pick the package that you are eligible to apply for.
SIDE NOTE: If you don’t have the best credit history, then you will need to apply at a micro-lender and not a bank.
Documentation in Small Business Loans Applications
Once you have identified the small business loans packages that you can apply for, you will be provided with application forms to fill in and you will be asked to attach copies of certain necessary documents that they will need to go through before they can either accept or decline your application for a small business loan. Among the documents you will need to prepare and make copies of the following: recent financial statements, federal tax document copies from your business (if you already have one started up), a well prepared business plan and the projections of expected returns for two years of more if possible (if you are looking for a startup small business loan), real estate purchase agreement document (if your business is looking to expand and is buying property or if your first step in your new small business is to buy permanent premises for it), your credit information (if you have any) and any other copies of necessary documents that you may be asked for.
You will then have an underwriter who will go through the whole application with you and will analyze every little detail before finally preparing the loan report. The underwriter may need additional information from you. Once the report is complete it will be submitted for approval to the credit committee. Once a decision is made, you will receive a letter in the mail outlining whether you’ve received an approval or denial. If the approved, the loan will be deposited into a bank account designated by you. If it is denied, you may have the option to appeal or re-apply at a later date.