You’re finally ready: You’ve determined the time is actually right to apply for a small business loan. However, just like becoming profitable has a lot to do with that pre-launch work, getting good terms on a loan has a lot to do with how well you’ve prepared to apply. Lenders want a holistic view into the financial health of your business. They’re counting on you to follow through with your “IOU” — and so they need some information to evaluate your trustworthiness to pay back what you borrowed. That’s why prior to diving into the application process, you’ll need to have:
- A clear understanding of your credit histories (personal credit score and business credit score)
- Financials (income statement, cash flow statement, balance sheet)
- Tax return(s)
- Deposit history
Lenders rely on this information to evaluate:
- What is the financial health of your business?
- How risky is it going to be for us to lend to this company?
These factors not only impact your likelihood of getting approved for a small business loan, but the amount you’re
approved for as well as your interest rate.
Got everything in order? We’ll show you how to apply for a small business loan online in the following installment.
Samantha Novick is the Social Media Manager at Bond Street — a company focused on making small business loans simple, transparent and fair. Check in next week for a new video on how you — as a creative entrepreneur — can take advantage of small business loans to grow your business.