So you have decided now is a great time to scale your business, and you are seeking out a working capital loan. Most online lenders simply request a simple application, and a few financial statements to get started. While this seems fairly simple, there are a few steps to take to ensure you are not hurting your chance with simple mistakes. When filling out a small business loan application, here are some important things to keep in mind.
- Be accurate, do not guess. A common mistake is just plugging in numbers or figures instead of actually making sure they are accurate. You want to reflect your accurate gross revenue, any current MCA or loan balances, and an accurate business start date. Time in business is a critical portion of the decision of your application, make sure this matches your corporate filing, or DBA filing date accurately. Putting too early, or an inaccurate older start date can put your application in not so prime position.
- Use a company email address. This is something we see all the time. When a lender is reviewing your application, they want to ensure your company is legitimate, and trustworthy. If you are using a free service such as Hotmail, or Gmail, make sure it is your company name. It is highly advised to use a professional domain if possible.
- Be accurate with your debts. Most small business loan applications will ask for any current MCA or term loan debt. This is also a critical part of the decision, and ball parking or guessing these figures can result in an approval that ultimately does not fund. Most lenders and MCA funders will be happy to provide a balance upon checking, or better yet, request the payoff letter upfront. This will ensure a speedy process in closing of your financing.
- Lastly, make sure your ownership breakdown matches your tax returns. Something we see a lot, are handshake agreements, pending transfers etc, that are not legally binding. Part of the closing process is proof of ownership verification, so it is important to reflect accurate ownership, and respective percentages.
A small business loan application typically is a very simple process, however without the proper guidance from a professional advisor, such as a Strong Capital Funding agent, simple mistakes can make what should be a very simple process, a headache, and even cost you an approval.
