Once you have applied for your loan and awaiting approval, it can be a very stressful period not knowing if your loan will be approved or not. So why not take the stress and fuss out of the deal by making sure you have everything necessary and in order to be produced at the right time so that you will have no reason to worry about your loan being not approved? Given below is some good advice on how to get your commercial loans approved.
Business Profiles and Plan
Collect all documents relating to your business such as your business registration, since when you have been in business, what type of business you are involved in, the number of employees in your organization, your income, profits, annual sales, overheads and most importantly the plan you have drawn out for your new business venture. It should be a comprehensive plan where your financial projections is clearly outlined for the lender to go by.
If you have share holders with more than 20 percent shares in the business, you will have to get their financial standing, information about other partners or owners who have an interest in the business together with schedules of payments, debts, loans and any collateral that has been utilized to secure other loans, if any. You may also attach your personal financial statements that lists your personal assets and liabilities.
Loan amount required
You should give in detail the amount of money you require to start your business, type of loan, how the money you receive will be used, repayment plans, and your present working capital.
You have to let them know what you will be using as collateral to secure your loan, any borrowed funds at present and cash available in hand.
Apart from the above, you will also have to keep ready the balance sheets and Profit and Loss statement for the last three years at least and any other financial documents relevant to your business.
While the above documents are mandatory, you should also be ready to produce any other document that the lending institution may want to inspect. Especially when it’s a commercial loan they like to know your risk potential and how safe they can feel by granting you the loan. So, be ready to furnish the proof to them and having them ready in one go will make it easier for all concerned. The additional documents you might need to produce are articles of incorporation, leases, tax payer ID, insurance purchased for collateral.
The more proof you submit the better your chances are and always keep in mind that it’s you who needs the loan and therefore its up to you to make it evident to the lender your ability to repay the loan.