Whether you run an existing business or starting a new one, your finances play a big role in your success. In case you need a short-term or long-term business loan, here are some tips that will help you get the financing you require. As you approach the lenders, it would be helpful if you considered the loan interviews as something similar to job interviews.
Before setting up the appointment for the interview, do your research and find out all you can about a particular lender. Ensure that you have all the documents they are likely to ask for ready and remember that the main question in the lender’s mind is, “How likely are you going to pay the money back?” You need to offer an affirmative answer to this question if you are to nail the loan interview and get the finances you require.
Research Sources of Finance
As you prepare for the business loan interview, you should take a look at possible sources where you can submit your application. Some of the options include credit unions vs. alternative online lenders, lending club vs prosper for debt consolidation, and banks. A bank where you do your regular banking is more likely to trust in your ability to honor your commitments.
Your Credit Scores
Get a copy of your personal credit report from a credit-reporting agency. If your business has been around for a while and it has a distinct identity, you can also get a credit report in its name. Study all the credit reports carefully and ensure that any errors or discrepancies are rectified immediately.
Taking steps to correct errors will likely increase your chances of getting the money you need at great interest rates and other terms & conditions. Detailed information on your credit scores will help you be more prepared as you step into the business loan application interview.
Gather all Your Information
As you do your homework on a lender, make sure that the said lender has your business’ best interest at heart. Find out more about the possible documentation they will likely ask for and prepare it. Some of the documents typically requested by lenders are a business plan, tax returns running back a few years, accounts receivables and payables, current business debt and repayment schedule.
Other documents include financial statements with an operating plan, personal tax returns and financial statement, documentation on collateral offered, repayment terms you have in mind, your position in the company, physical address of the business, and your social security number as well as proof of identity.
Apart from preparing the documents above, you need to prepare a couple more documents that contain information about your business’ finances. These include documents related to credit cards or loan repayments. The payments you have made towards your dues might not show up on the credit report and the score may not increase immediately.
Preparing for the Interview
With all the necessary documentation neatly put in a folder, you are now ready to go for the loan interview. Prepare for the session by having a mock trial run with a friend and ensure that you have answers ready. Some of the questions you can expect include why you require financing and how you intend to pay back the loan.
Make sure that you are familiar with your business plan details and respond with confidence. This is your chance to defend the viability of your business plan. You may not hear back from the lender immediately, but make a point of informing the lenders of any positive developments that may occur after your business loan interview.