Getting approved for a business loan is not as simple as many business owners think or wish it to be. But following a few tips can greatly increase your odds of getting the loan that you need.
The turbulent economic times of the past decade have made it more difficult for anyone to get a loan and especially businesses. Due to the fact that a business’s financial success or failure is more directly connected to the economy than the finances of a person, getting approved for a business loan has become more difficult. Changes in the economy and political climate can cause the business world to fluctuate quickly and drastically. So it is more important than ever that you make every effort to impress potential lenders in every phase of your application process.
Knowing that you are entering into a rather lengthy process, it is critical that you have a working knowledge of commercial loans and the processes and documents that you will be working with. Gathering information will allow you to prepare your documents as well as your frame of mind throughout the loan application and review. This is also a good time for you to check your credit score and address any issues that you might find. Having a score of at least 700 is pretty much a must and scoring closer to 800 will greatly improve your chances of getting the nod for a business loan.
Documentation and Detail
Understand that your lender is going to determine a lot about you and your business from reading your application and speaking to you for just a few minutes. Being able to use that precious time to create a professional image is critical for your loan approval. Having a detailed plan showing how you will use the money that you are borrowing, how it will help you to make money and how you plan to pay back the money are all important items to communicate to the lender. In addition, a professionally compiled packet of documents shows the lender that you have invested time and effort into creating the packet and that you are serious about your work and the loan that you are requesting.
Introduce Your Team
Growing any business takes time and a lot of work. Doing everything your self can feel efficient to you but others might not see it that way. Presenting your management team and professional advisors can also increase your chances of getting the business loan that you need. A truly wise person knows what they don’t know and is willing to surround himself with smart people who can help him in those areas. Having a mentor or advisor shows that you are smart enough to seek the advice of seasoned professionals. And including the experience of your management team in the loan application process allows the lenders to see that you have designated professionals to assist with all of the management aspects of your business. The strength of a team is always greater than that of an individual and will increase the odds of success for your business.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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