No matter what type of a business you are running you need cash to overcome the daily expenses & when you become short of cash then obviously you will need to get a small business loan whatever source of cash you use for small business either it is a bank or friend the individual or entity will have the same expectation.
You can increase your chances of securing a small business loan successfully by being prepared to meet those expectations.
Put yourself on the other side of the desk for a moment. If someone asked you for a small business loan, you’d want to know exactly why he or she wanted the money and what the chances were that he or she would repay the loan in full and on time. So if you are looking for a loan then the very important tip for you is to be prepared.
What you will need to do is prepare certain set of documents that will influence the lender that you are a good contender for the loan. The document will consist of a
A business plan:
A business plan not only show the purpose of lending but also shows what you plan to do with the money.
Cash flow projections:
When an institution lends you money its primary concern is when & if you will be able to repay the loan. Your business’s cash flow projections give lenders concrete financial data that they can use to assess this risk.
Besides these two important things there are other things that will be need these are:
A statement of your personal financial status:
It is a list of your personal assets and debts to give the lender a fuller financial picture.
Past business tax returns:
If your business is established and you have past business tax returns, it’s a good idea to take them with you. They’ll give the lender a better idea of how your business is doing financially.
A credit rating report:
When applying for a loan it is a really good idea to show your credit report & if you have a good credit report your chances of getting loan approved will be highly increased. If you don’t have a credit report & are unaware of your credit score then you can get it from any of the three agencies & know your credit report.