Exactly what makes a lender to lend borrowers a small business loan today is among the top questions our bankers hear – and I would like to share my our response to this.
Based on our quarterly survey of small businesses countrywide – income and revenue are key concerns for small businesses. And one of three small businesses are able to secure credit but much difficulty. In recent economic recession, most small businesses are holding high amounts of debt. Small businesses are facing hard time in getting credit due to decrease in consumer spending and sales.
While small businesses are facing challenge within an uncertain economy, today a substantial amount of small businesses are getting loans. At Merchant Advisors, we had a modest rise in loan demand within the first half of the season. The businesses that are applying for small business loans today are more influential as to what they were before, and so such businesses arrived at Merchant Advisors for loans, we could say “yes” to more small businesses.
There are five important keys to follow that will get small businesses quick business financing from lenders.
Your Business Have Steady Income
Steady income is really a key indicator of the business’ success and its future prospects. And if you are able to show reliable and steady income of your small business, your lender will have the assurance that your business have the ability of repayment.
Your Present Obligations Are Handy
Every financial lender wants to ensure that business have the ability to undertake additional credit debt with a strong financial position to handle its debt obligations.
Business With Good Payment History
Before offering credit to a business, a small business loan lender must have confident in the business ability to repay. A business repayment history exhibit records of its capability to sensibly repay the old debt. Getting credit/debit card is a great way to begin creating a payment history for the business.
Demonstrate Business Insight
Effective businesses reinvent themselves constantly. Your lender really wants to observe that you can foresee potential challenges and also have the management skills to beat hindrances and pursue growth prospects. This can be easily done by having a strategic business plan that addresses the main challenges your business may face.
Solid Association With Lender
Having a solid association with the bank not get you the likelihood of exhibiting how you manage your money like a creditworthy business owner but also get you quick approval for funding.
One final key: if debt, earnings or repayment history is barriers in acquiring financing for the business, have a look at your business design. Are you able to identify new revenue streams for your business? Can you lower your business expenses? Is it possible to improve profitability through alterations in business operations?
Engage with your lender who will help you consider all of the options which will enhance your business and the probability of obtaining quick approval for your next small business loan application.