How to Get a Business Loan, and the Documents you Must Know
January 25, 2009 § Leave a comment
Preparation is one of the keys to success. And the lack of preparation is also one way to destroy your enterprise. To avoid this, you must know how to get a business loan, in a proper way of course. Usually those people who are wondering how to get a business loan have no idea how much they should use in order to get a good one. They don’t even know the information they should take note of. Are you one of these people still wondering how to get a business loan? If so, I’m now here to give you some information that will surely widen your knowledge and somehow answer the question “how to get a business loan?”
So, how to get a business loan? First, you must know the following information in order to ensure that you and your lender would understand each other.
1.) Business Plan
It is a document where in you should state why you are applying for a small business loan. Be sure to clearly explain where you’ll use the money you will borrow. You actually don’t need to put melodrama on it. Be as honest as you can.
2.) Cash Flow Projection
Here, your lender would know how you are going to pay the loan given to you. The promised dates when you’ll pay the given money and the risk if ever you didn’t make it on time, are written in cash flow projection (a financial concrete data).
3.) Personal financial statement
This is a document which is all about the owner of the enterprise. What’s written here are the list of assets, liabilities and capital of the enterprise owner. Keep in mind that this is called Personal financial statement simply because it’s about the owner himself, and not the enterprise. This document is important because through this, the lender will have an idea or background about the enterprise owner. In case the enterprise itself hasn’t paid the loan, the liability of the enterprise might be extended to the personal assets of the owner.
4.) Past business tax returns
If ever your enterprise is already established before applying for a business loan, and has filed tax returns, you should take these with you. This enables the creditor to get a good idea of how financially stable your enterprise is.
5.) Credit rating report
This is not actually essential because lenders can look for your credit rating report by themselves. Yet, isn’t it better if you know what the report says about you and your enterprise? For instance, your lender might ask you something related to your credit rating report. He will think that you really care about your enterprise if you know what’s up with it.
This article doesn’t directly answer the question “How to get a business loan?”, but I know that this information contributes on getting the business loan. Without knowing the above information, do you think it’s possible for you to get a business loan?