Being well prepared for your business loan application can be the difference between an approval or a decline. Its easy to just jump straight in and appy however every lender has certain requirements you must meet for an approval so you must make sure you meet those requireemnts before applying.
Your business may have an unresolved debt you’re unaware of, you may have had a slow month which shows a declining revenue, you may have missed a payment on an existing loan. All of these can be a red flag to a New Zealand business loan lender and mean your application is declined. You need to ask yourself is a business loan is the right idea for your business, and prepare well before applying. Here’s what to consider before applying for a business loan:
Determine your business loan needsBefore applying for a loan, identify how much money you need and what you will use it for. This will help you decide which lender to apply with and what kind of loan you require.Review your personal and business credit scoreLenders will evaluate your personal and business credit history when considering your loan application. Check your credit score and credit history to make sure they are in good standing and fix any errors that may negatively impact your creditworthiness. It is common to apply, only to find there is a debt you were unaware of, or even an error on your credit history that affects the outcome of your application.Gather your financial documentsLenders will want to see your financial records, financial report, profit and loss, bank statements, and cashflow forecasts. Make sure you have access to all or some of these before applying for a loan. Your accountant or online accounting software can help with most docs required.Pre-assess your businessIts a good idea to chat with your accountant or business partner and go over your current financial position. Is this the best time to be applying for a loan? Have your last 3 months been showing good profits? Have you missed any auto payments? Is your IRD all up to date? Too many red flags will mean a declined application. Research lenders Shop around and compare different lenders to find one that best suits your needs. Consider factors such as interest rates, loan terms, and repayment options. A business loan broker can assist free of charge and help you prepare your application + get you to the right lender. A referral fee will be included in your loan for the brokers assistance only if the loan settles so a broker is great way to give your business the best chance of approval.Prepare your loan application Fill out the loan application completely and accurately. Be prepared to provide detailed information about your business, including your business plan, financial statements, and available security.
Remember that getting a small business loan can take time and effort. By being prepared and following these steps, you can increase your chances of getting the funding you need to grow your business. If you want to chat with Compare Business Loans, our brokers can determine what kind of funding your business needs and which lender would be the best option over a 5 minute phone call. Enquire today and we’ll give you a call.