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Find Out How To Prepare For A Business Loan Lender

Feb 9, 2008
Lenders are a different breed. They are risk takers in lending to entities like business start-ups; yet again they do nothing without it being a very safe deal. There goal is to make sure that their money not only returns in full, but also brings more money along with it. Risky ventures can be very lucrative but there must be a solid business plan behind the business. If the business is established, it must show profitability.

A business lender looks to ensure that the loan will be paid in full by you, the borrower. They have a business to run, and you must not be at risk but an asset to the organization. They have to know that you all are going to pay back every penny and will be a credible business that will be around for years to come. For starters, they look at everything from the business plan to the financial books. Once they go through the process there are no surprises if they are going to give you the loan.

In the decision-making process, lenders like to look at what is coming in and going out financially. They check out things like annual sales, recurring revenues, profit margins, debts, collateral, and everything else that is on your books.

New business is always having more obstacles than established, proven businesses that have been in the market place for years if not generations. Obtaining a business loan is no different. The new business has to prove itself to be a profitable enterprise and the entrepreneur must prove that he or she has good personal credit. Otherwise, they will have to go at it without a business loan.

As a business startup, be prepared to show your personal credit information such as debt, liquid assets, collateral (such as real estate property), tax returns, and other financial statements related to your personal business. Lenders look at all these things to determine your credit worthiness.

When you apply for a business loan, the lender wants to know what kind of savvy financial person you are as a whole. If you're not very good at taking care of your own personal finances, then how are you going to be prepared to take care of the big finances that you are asking them to lend. Remember risk is not something a banker loves to take. It is more of a calculated risk.

The fact is this; give the lender what they're asking for and nothing else. Don't give them in a reason to reject you. Plus you don't want to bog them down unnecessarily. The fact is if you give them the truth and nothing but the truth in your financials you will do okay if you've done everything right
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Business Loan Basics provides insights into obtaining fast small business loans.
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