According to one study, 43% of businesses said that they would have to close if they didn’t get some money soon.
If you’re in the same position, you might be wondering how to apply for small business loans.
Keep reading for the perfect guide on applying for small business loans!
Gather Application Materials
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Each lender will have different parts of an application that you’ll need to fill out for the application. In general, they’ll want information about your business and all kinds of documentation. They may need to see a plan for your business or how you’ll use the loan.
You’ll also have to provide financial statements from your business. This includes documentation on your annual revenue and your loss and profit statements. Bring your tax documentation as well.
You should also bring as much information as you have about the owners of the business. Bring all the personal information and how much each person owns of your company.
Before you apply, make sure you build business credit. Because you’ll also have to bring your business credit score as well.
Figure Out How Much To Borrow
Before you apply, you have to figure out how much you want to borrow when you apply for a loan. If you borrow too much, you may have to default on the loan.
If you don’t borrow enough, you’ll have to ask to borrow more which will make it even more difficult.
To figure out how much money you need to borrow, you should know your costs. The costs will depend on certain equations. You’ll have to factor in the interest and principal into your borrowing.
Shop Around
Once you’ve got all your information together, start shopping for different lenders. You should figure out what type of lender you want to get from.
You should compare about three to five different lenders. Some people just want to go through the first lender, but you may get a better deal through someone else.
The more lenders you compare, the more likely you are to find a loan that’ll work for you.
Apply
Now that you’ve found the right lender, you can start applying. Some companies will let you pay online, and you can connect your accounts for financing.
If you’re applying somewhere like a credit union or a bank, then you can apply in person or on the phone.
Regardless of how you apply, find out how long the turnaround time is so that you know whether your loan was approved or not.
Learn More On How To Apply For Small Business Loans
These are only a few things to know on how to apply for small business loans, but there are many more factors to consider.
We know that running a small business can be stressful, but we’re here to help you out.
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