Before you send in your small business loan application, there are a few questions you should ask yourself. The application process is lengthy and can be complicated, so it helps to take a step back and make sure you’re fully ready. Read on for five important questions to ask yourself before applying for small business financing.
1. Will I be able to pay it back?
Do some financial calculations and make some financial projections to ensure that you will indeed be able to pay back the loan in a timely fashion. If you’re uncertain about your ability to repay the loan, that is something you must seriously think about. It would be a good idea to adjust down your loan request amount, or to recalculate financial projections. Not having enough money to repay a small business loan in a timely manner can have serious consequences for you, especially if you use your house or car as collateral, which brings us to…
2. What will I use as collateral?
The most common choices for collateral are houses. Other people may use cars, artwork, and even expensive jewelry. Some banks also offer security-based lending, which allows you to use your own investment account as collateral, but this is used more often for short-term loans. Be careful about what you use as collateral, because if you fail to repay the loan, the bank will gain possession of the item.
3. How much money do I need?
This is such a crucial question to ask because it can be problematic if you request more or less than you actually need. Do some financial planning, and make sure your calculations are precise. If you get stuck or have questions, the experts at Biz2credit can help.
4. What will I do if my loan application is rejected?
You should have a back-up option in place if you get rejected. One thing to consider is the merchant cash advance. While interest rates are higher, you can still obtain a cash advance — even if your credit score is not spectacular. Keep this option in the back of your mind as a back-up plan.
5. How long will it take for my loan application to be accepted or rejected?
Depending on the lending institution you approached, it can take anywhere between 6 weeks and 3 months to hear back. Keep this in mind when you turn in your loan application, to ensure that you leave adequate time between when you apply and when you actually need the money.
Biz2Credit can help you with your application for small business financing. Call (877) 861-2210 or visit https://www.biz2credit.com/.