Getting approved for a loan is never easy, but it doesn’t have to be hard either. There are certain things that lenders look for that can make the process go much more smoothly than it would otherwise. Some of these are obvious, but others are not so much. These are the things that lenders tend to read between the lines when it comes to presentation, conversation, and business plan. They may not ask questions to come to a conclusion, but they definitely observe all they need to through the course of the application process.
Know How to Start Small and Grow Big
Lenders recognize when a company is starting out too big. They also recognize when a company could start large, but choose to go the more conservative route of growing slowly. This is a mature business person’s approach to obtaining a small business loan, and it is surprisingly rare with newer entrepreneurs. It is a quality that is definitely something that will make you stand out in a positive light when looking to land any type of small business financing.
Understand the Numbers
Regardless of whether you have an accounting degree, were a general business major, or didn’t go to college at all, a lender can tell if you know what you are looking at when you see the financials and whether or not you know how to interpret them. Knowing what the numbers say and what the numbers mean are two different things, and lenders know whether you know, or not. If you do not, just be certain you have someone on board who does. That will go a long way.
This is something that is paramount regardless of the type of financing sought. Both established business owners looking for equipment financing and those new to business ownership seeking franchise loans need to show professionalism at all levels. This means not only in appearance and speech, but in proposal presentation as well. If you feel there will be issues providing a professional business plan, get help. There are plenty of companies that can help provide this service, including the Small Business Administration and sites such as Biz2Credit.com.
Know What You Don’t Know
It is okay to not know everything you need to know, as long as you recognize it and show that you are doing something about it. Participating in training or taking on a partner that does know what you do not know with go a long way with lenders. It shows that you are bright enough to get that there are gaps in your knowledge, and that you are working toward filling those gaps.
A lot goes into making the lending decision, and not all entrepreneurs get the answer they want. However, these tips will help ensure that a good business idea doesn’t go by the wayside due to issues that can be easily remedied.
This article was submitted by Faith Stewart. Faith Stewart has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.