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Checklist to consider before Applying for a Business Loan

Finding the right type of business loan for your company is a stressful process. This 5-minute read shall elaborate on how to make the entire search easier, and what sort of things are to be kept in mind while on a lookout for a business loan.

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It is quite tricky to find a business loan that is best suited for your type of business. There are several steps to take before you choose a particular type of business loan.

Before you start with the application of your business loan, please make sure that you have the following documents as they are crucial to obtaining any business loan;

  • A form of valid ID

  • Personal background

  • Resume

  • Business plan

  • Business license

  • Customer list

  • Bank statements

  • Profit and loss statements

  • Tax returns

  • Personal credit score

  • Business credit score

  • Business debt schedule

Questions asked by Lenders

If you have found the lender best suited to obtain your business loan for your company then congratulations! Half of your target has already been achieved. But, just as you had questions about the loan process, it is now the turn of the lender to ask you questions about your business.

The following list of questions can be asked;

1. Who Are You?

Although this seems like a basic question, it is also the right of the lender to know how legitimate your business is as well. This answer can be answered by providing a valid ID proof as well as giving detailed information about how your company is financially doing.

2. How legitimate is your company?

Although you might know the ins and outs of maintaining a small business, it is up to you to convince your lender to provide the cash input to increase your business. This can be proved by giving the monthly or yearly financial statements of the company as well as showing a copy of the business plan so as to give the lender an idea of how the company will benefit from extra funding.

3. Who are your customers?

Lenders may want to know who the clients of the business are and how many of them exist. They will also want to find out if the clients pay your business in time. It will be easier for both you and the lender if you have a list of all your clients ready with the detailed information, to make the process move faster in obtaining your business loan.

So there you go folks! If you are prepared with the above checklist and for the mentioned list of questions, the process of obtaining a business loan will be an easy procedure.

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